Fiscal stalemate: A new proposal and more accusations
November 30th, 2012
08:09 AM ET
9 years ago

Fiscal stalemate: A new proposal and more accusations

Washington (CNN) - The White House and Congressional Republicans are squaring off in negotiations to avert the fiscal cliff, with each side accusing the other of blocking a deal.

For the first time we're getting a look at what the White House is offering to break the stalemate. Republicans consider it an overreach. Democrats make clear it's a first offer, to get specific on the numbers.

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Treasury Secretary Timothy Geithner and White House Director of Legislative Affairs Rob Nabors presented the details while making the rounds on Capitol Hill Thursday.

The headlines? The White House is asking for $1.6 trillion dollars in new taxes. This would include the president's campaign pledge to raise tax rates on families who make $250,000 a year and more. It would bring in additional money by closing loopholes, limiting deductions, raising the estate tax rate to 2009 levels and increasing capital gains and dividends taxes.

Republican sources tell CNN the $1.6 trillion figure is higher than any number the White House had previously presented and was so disarming, according to one source, it set the talks back.

Democrats say the GOP is feigning outrage. In September 2011, Obama first proposed raising taxes one and a half trillion dollars - at that time to pay for the so-called Jobs Bill. Republicans dismissed it as a political stunt with no chance of movement.

It would seem the White House is digging in on its position on taxes - or at least making their stance clearer to the Republicans and the public.

Reflecting a new aggressive posture by the Democrats, the proposal laid out by Geithner also called for additional spending, including $50 billion in new stimulus spending next year, a home mortgage refinancing plan, an extension of unemployment insurance and an extension of the payroll tax cut. It includes a permanent mechanism to vote on a debt limit increase, which would avoid the kind of crisis the U.S. faced in the summer of 2011.

In return, according to multiple sources, the Obama administration is offering to find $400 billion in new cuts to Medicare and other entitlement programs, with the specifics to be hammered out next year.

While Republicans called these proposals unbalanced and unreasonable, White House aides made clear the president is ready to take a counter offer.

This all amounts to an elaborate negotiating dance. With time running out until tax rates automatically rise and drastic spending cuts kick in - part of the so-called sequester - both sides are playing for leverage against the clock.

Democrats are emboldened by electoral successes and that the president won a second term while pledging to do what the Republicans are still objecting to: raise tax rates for the wealthiest. Democrats believe the Republicans must and will relent on that point.

To that end, CNN learned in a phone call Wednesday night Obama told Boehner there would be no deal unless the GOP agrees to raise tax rates for the wealthiest. That means recently floated alternatives – including closing loopholes or limiting deductions - would not be enough on their own. Rates must go up as well for the top 2% of income earners.

Republicans tried to turn the conversation away from taxes, insisting the real debate should be about spending cuts.

"Despite claims that the president supports a balanced approach, Democrats have yet to get serious about real spending cuts," Boehner told reporters Thursday.

Reflecting a growing sense of pessimism among Republicans, the speaker added, "no substantive progress has been made in the talks between the White House and the House over the lat two weeks."

In a statement that accused Republicans of blocking a deal to protect "the very wealthiest individuals," White House Deputy Press Secretary Josh Earnest responded to the GOP in an email.

"The President has already signed into law over $1 trillion in spending cuts and we remain willing to do tough things to compromise, and it's time for Republicans in Washington to join the chorus of other voices - from the business community to the middle class Americans across the country - who support a balanced approach that asks more from the wealthiest Americans," Earnest said.

Filed under: Fiscal Cliff • John Boehner • President Obama
soundoff (266 Responses)
  1. Dominican mama 4 Obama

    Stick to your guns indeed Mr. President.
    If you look behind you you'll see us: the 47%ers, 99%ers, 52%ers, and even some 1%ers.
    We still have your back.
    Forward with America.
    Do not cave.

    November 30, 2012 11:25 am at 11:25 am |
  2. Zenger Folkman

    Rick in OP.: Who is Greg Gutfeld, some wacko you watch on Fox? Is he an economist? What are his credentials?

    November 30, 2012 11:25 am at 11:25 am |
  3. alfred

    If you cave in on the tax cuts for the 2%, the republicans will have won. You ran and was voted in on the repeal of the tax cuts for the wealthy. Please keep the promise to the american people.

    November 30, 2012 11:26 am at 11:26 am |
  4. Claudia, Houston, Tx

    When you have a bunch of doctors and lawyers as Congress people who have no background in economics what we have is a courtroom trial of debates by attorneys and physicians who are no more than patients. A lawyer or a doctor wouldn't hire an economist to fight their case so why do we have lawyers and doctors trying to be economist. These people are only interested in themselves, let's get serious.

    November 30, 2012 11:29 am at 11:29 am |
  5. California Gary

    I feel a little sorry for the Speaker........he is engaged in a high stakes poker game and all he is holding is a pair of twos. Obama has a fistfull of aces and it looks like he won't be shy about playing them this time around. The American people will be the winners........and the GOP will get bloodied good in this go around. As they should, after all the shannanigans they have pulled in the past.

    November 30, 2012 11:30 am at 11:30 am |
  6. Conscientia

    Boehner: Why don't the Democrats present a plan!
    Boehner: Oh no! The Democrats have presented a plan!

    ...and it's just what they have been saying all along. And Boehner is shocked...shocked.

    November 30, 2012 11:30 am at 11:30 am |

    After the great depression FDR gave America the New Deal a set of legislation that brought hope to millions of suffering Americans, After this latest economic disaster caused by mostly Republican policy all they want to do for America is give it the Raw Deal.

    November 30, 2012 11:30 am at 11:30 am |
  8. Ken in MD

    Boehner continues to spread the lie that increasing rates on the rich will hurt employers. 97% of small businesses earn less than $250k per year (per the SBA). Tax rates on those making over $250k per year were much higher under Clinton, and 23 million jobs were created. Time to stop the lies, stop protecting the rich, and do your job.

    November 30, 2012 11:30 am at 11:30 am |
  9. Jules

    So offer a counter proposal already!

    November 30, 2012 11:30 am at 11:30 am |
  10. Maximiliano

    The first time I've seen Obama prove that he has a mind of his own.

    November 30, 2012 11:32 am at 11:32 am |
  11. Jules

    The GOP once again is saying no not that but offering nothing of their own. Come up with your own idea of a deal. Have an idea of your own for once, GOP.

    November 30, 2012 11:32 am at 11:32 am |
  12. Texan

    The problem with 'tax more now and discuss cuts later' is that the cuts NEVER come. They did this to Reagan, he raised the taxes and then they shafted us on the cuts. They did it again to Bush W. Now they want to do it again?

    Simple math says that the tax increases won't even dent the financial mess we are in. Not now and not in the future. Economists on both sides say raising taxes hurts the economy, which is already in retreat.

    Why is it that Obama is pushing for tax increases that won't help but refusing to cut spending which we know will help? The answer is that his goal isn't to fix the problem, it's to pander to the petty jealousies of his base. This is what he calls 'FORWARD' I guess. Nice.

    November 30, 2012 11:33 am at 11:33 am |
  13. Reince Your Priebus Daily

    This just in:

    Obama sneezed and the GOP is furious.

    November 30, 2012 11:33 am at 11:33 am |
  14. Compprog

    The baseline is what will happen if we do nothing. i.e. the Bush tax cuts will go away and significant cuts in the budget. Tax cuts for those making under $250,000 can be added back in if the Republicans are willing to vote for that. Cuts to some programs can be phased in more slowly. As for the debt limit I believe that the constitution provides the President with ample authority to continue to pay our bills as they become due.

    November 30, 2012 11:36 am at 11:36 am |
  15. Texan

    The claims that the GOP has not put forward their own plan is ignorant. The Ryan budget works and it's been around for years ...but Reid won't let it come to the floor for a vote.

    How can people claim there is no plan from the GOP when it's already been authored, with bipartisan input, and has huge support in Congress?

    November 30, 2012 11:36 am at 11:36 am |
  16. calamity jane

    The middle class has finally put their foot down. No more benefits to the wealthy at the expense of the middle class. You've had enough benefits. The trough is empty. It's our time. It's our country and we are taking it back. Your money could not buy a President for yourself. That was just the beginning. This is the rising.

    November 30, 2012 11:36 am at 11:36 am |
  17. Florida Joe

    Job creators?????? You guys have had 10 years of these tax cuts......Where the heck are the jobs???????
    Jobs are created by demand of the middle class for products, services etc.
    Repubs stop your whining you LOST BIG TIME.........Obamacare is the law......get over it and get in line and do what the MAJORITY of the people want instead of worrying about your beloved 1%............ENOUGH

    November 30, 2012 11:36 am at 11:36 am |
  18. Anonymous

    Americans, why are you so unvelievably stupid? WE DON'T EARN WHAT WE EAT. WE BORROW 1.1 TRILLION A YEAR... for those who have problems with numbers, it's $1,100,000,000,000 or 6.5 million homes (@170k/home). Whatever your issue is with taxing someone more, the tax part of this conversation is 70 billion... not even 7% of the issue. Democrats

    November 30, 2012 11:39 am at 11:39 am |
  19. Ray E. (Georgia)

    If the New Deal worked so well why are we in the mess we are in? The New Deal has turned into the Raw Deal. Too many Chiefs and not enough Indians ?

    November 30, 2012 11:43 am at 11:43 am |
  20. fiftyfive55

    One thing is certain-We the taxpayers are gonna get it in the end,and you know which end I mean.Big business and our politicians got us into this mess and again we have to bail THEM out.

    November 30, 2012 11:44 am at 11:44 am |
  21. Jeff

    How much is enough for the democrats? The reality is there is no limit to the amount of our money these people can spend. Demand real spending cuts now.

    November 30, 2012 11:45 am at 11:45 am |
  22. pool sand

    In both 2000 & 2004, I watched President Bush,(who actually lost the popular vote by 500,000 in 2000), immediately hit the airwaves to crow about the "political capital" he garnered by winning the election. He spuriously claimed a mandate from the voters, and declared his right to "spend" said capital.

    Fast forward to 2008 & 2012, where President Obama won both elections convincingly. This year, Democrats picked up seats in both Houses of Congress, and outpaced Republicans in the House by more than 2 MILLION votes nationwide. THIS is what an actual mandate looks like.

    So guess what comes next, Republicans? The President gets to now spend HIS political capital. He gets to enact his policies, name his choices for various open positions in government, and govern 100% of the population, not just the 2% the Republicans seem most concerned with.

    If you don't get with the program, the Democrats need to do..........NOTHING ! It is the Republicans that must yield, or be saddled with the responsibility of raising taxes on the 100%, not just the top 2%. The Bush tax cuts are expiring. Sequestration will automatically kick in. How ironic that President Obama gets to quote Clint Eastwood here. "Mitch McConnell, make my day". "Eric Cantor, do you feel lucky, punk?" "John Boehner, a man's got to know his limitations." Where's that empty chair now?

    November 30, 2012 11:45 am at 11:45 am |
  23. Tommy G

    $1.6 TRILLION in new taxes???!!! Is this on top of the 20 new taxes Obamacare is slapping us with???

    And then the Democrats want to INCREASE spending now and then promise to cut later?

    BWAHAHAHAHA!!!! This is the proposal of a lunatic. It is clear the Democrats are hell bent on wrecking this country financially. No budgets, astronomical spending, taxing and borrowing.

    Bring on the cliff now. It appears to be what the Democrats want. It is the only way spending will EVER be cut.
    This country needs a balanced budget amendment NOW to stop this insanity.

    November 30, 2012 11:46 am at 11:46 am |
  24. mgrgurich

    Its called ngotiaton one side says 0 one side says 10 then the 0 side says how about1 then the other says 9 then 2 then 8 then 3 then7 then 4 then 6 then 5 okay 5. Obama said 0 the GOP said no

    If Obama starts with 5 the GOP wont say okay they'll say 10 just like inthe first scenario.

    November 30, 2012 11:46 am at 11:46 am |
  25. Andrew

    The same stuff from before. Apparently the repubs didn't learn anything. Not to mention the people that still voted for these numnuts. Oh well!

    November 30, 2012 11:46 am at 11:46 am |
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