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Fiscal cliff talks appear to be stalled

By Andrew Taylor

Associated Press

POSTED:
LAST UPDATED: 05:14 a.m. HST, Dec 12, 2012


WASHINGTON » Despite an intensifying pace, little progress is being reported in talks on averting automatic spending cuts and tax increases that economists fear could send the U.S. economy off a "fiscal cliff."

House Speaker John Boehner and President Barack Obama spoke on the phone Tuesday, a day after the president offered to reduce his initial demand for $1.6 trillion in higher tax revenue over a decade to $1.4 trillion. But Obama continued to insist that much of the revenue come from raising top tax rates on the wealthy.

Boehner countered later Tuesday with another offer that aides to the Ohio Republican said stuck close to a document delivered to the White House a week ago. A top White House aide, Rob Nabors, came to the Capitol to respond.

Leading lawmakers expressed pessimism that a deal was close, despite increasing angst about a Dec. 31 deadline to stop the expiration of Bush-era tax cuts and separate across-the-board spending cuts that are the result of Washington's failure to complete a deficit-reduction deal last year.

"I think it's getting worse, not better," House GOP Whip Kevin McCarthy, R-Calif., said.

The Boehner camp again said it's up to the White House to proffer additional spending cuts to programs like Medicare. The White House countered that Republicans still need to cave on raising tax rates for the rich.

"Where are the president's spending cuts?" Boehner said on the House floor. "The longer the White House slow-walks this process, the closer our economy gets to the fiscal cliff."

In rebuttal, the White House swiftly detailed numerous proposals Obama has made to cut spending, including recommendations to cull $340 billion from Medicare over a decade and an additional $250 billion from other government benefit programs.

Obama remains determined that tax rates rise on family income exceeding $250,000, a move Republicans say would strike many small businesses that are engines of new jobs and file as individuals when paying their taxes.

House Minority Leader Nancy Pelosi said today that a bipartisan deal to avert a "fiscal cliff" is more likely if Democrats and Republicans don't try to over-reach on spending cuts.

The California Democrat, appearing on "CBS This Morning," said Congress and the White House need to agree on a provisional plan for taxes and spending. "Let's do something now," she said.

Pelosi says Democrats want to ensure that senior citizens aren't harmed, and she called Boehner a "well-intentioned" person. But she also said the GOP was pushing too hard on a Medicare overhaul, asking, "Is it just a trophy that the Republicans want to take home?"

"Get it done," she said, "and make corrections and expansions on it next year."

Two weeks before the year-end holidays, time to find agreement was short, but not prohibitively so.

"I think it's going to be extremely difficult to get it done before Christmas, but it could be done," Senate Majority Leader Harry Reid, D-Nev., said.

Boehner's office took the step — unusual in secretive talks — of announcing that Republicans "sent the White House a counteroffer that would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs."

Democrats have watched with satisfaction in recent days as Republicans struggle with Obama's demands to raise taxes, but Reid privately has told his rank and file they could soon be feeling the same distress if discussions grow serious on cuts to benefit programs.

In an ABC interview, Obama did not reject a Republican call to raise the age of Medicare eligibility from 65 to 67, a proposal many Democrats strongly oppose.

The proposal is "something that's been floated," Obama said, not mentioning that he had tacitly agreed to it in deficit-reduction talks with Boehner more than a year ago that ended in failure.

"When you look at the evidence, it's not clear that it actually saves a lot of money," Obama said. "But what I've said is, let's look at every avenue, because what is true is we need to strengthen Social Security, we need to strengthen Medicare for future generations, the current path is not sustainable because we've got an aging population and health care costs are shooting up so quickly."

Obama's plan would raise $1.6 trillion in revenue in part by raising tax rates on incomes over $200,000 for individuals and $250,000 for couples. He has recommended $400 billion in spending cuts over a decade.

He also is seeking extension of the Social Security payroll tax cut due to expire Jan. 1, a continuation in long-term unemployment benefits and steps to help hard-pressed homeowners and doctors who treat Medicare patients.

The White House summary noted that Obama last year signed legislation to cut more than $1 trillion from government programs over a decade, and was proposing $600 billion in additional savings from benefit programs.

Boehner's plan, in addition to calling for $800 billion in new revenue, envisions $600 billion in savings over a decade from Medicare, Medicaid and other government health programs, as well as $300 billion from other benefit programs and another $300 billion from other domestic programs.

It would trim annual increases in Social Security payments to beneficiaries and gradually raise the eligibility age for Medicare.







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soundofreason wrote:
All part of O'bama's master plan. Demand something you KNOW won't be agreed to, so, in the end, it's the other guy's fault and the tax revenue will come flowing. He's just making spotty photo opp appearences to "appear" he's "working" on this in between packing sessions for his Hawaii vacation. His 4 million dollar Hawaii vacation.
on December 12,2012 | 05:35AM
cardoc wrote:
The fall off this cliff is so overrated. Let's just fall and see what happens, which I believe will be nothing. If this tax vacation was so great why didn't the GOP back then give it a sunset date---duhhhh. Nobody wants to pay more but we gotta reduce the debt, cut-cut-cut can only take us so far without hurting the economy as a whole.
on December 12,2012 | 05:40AM
soundofreason wrote:
Stock market doesn't seem worried does it? I think a lot of crying wolf going on.
on December 12,2012 | 06:33AM
ichiban wrote:
Fiscal cliff ain't gonna happen. Remember the Dem and Gop are all POLITICIANS. All this talk is nothing but posturing their position. They can't afford the cliff to occur. They all wanna keep their jobs. They wanna get re-elected. So somewhere around the middle Jan. of 2013 both sides will come up with a compromise solution like; 1) Raise the tax rate on the richest 2%. 2) Leave the middle income tax rate alone but alter what is considered middle income brackets. 3) Dividends and capital gains, here they can fudge the numbers and rates but I hope they leave it alone. They'll ask for spending cuts like; instead of requesting for $200 billion more for the DOD they'll cut it to $150 billion. Sort of reminds me when our state legislature voted themselves a 35% pay raise several years ago when the majority of the workforce in the private sector had their raises frozen. Then our legislature felt guilty so they took a 5% pay cut. Now they only had a 30% pay raise. Boo Hoo. This is government at work.
on December 12,2012 | 06:44AM
Highinthesierras wrote:
Lets go over the cliff - Barry always said the Bush tax cuts were BAD, - Barry said you cant raise taxes on anyone in a bad economy - Barry was the architect of the cliff - Barry said he won't let Congress off the hook and he is willing to go off the cliff - now Barry said losing the Bush tax cuts is a disaster - Barry just can't make up his mind - does Barry love or loath the Bush tax cuts??????? Come on Barry, the election is over, it is OK to actually walk the walk, enough talk.
on December 12,2012 | 07:34AM
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