Economy & Budget

Fiscal cliff update Dec. 17: Obama, Boehner meet again

Fiscal cliff update Dec. 17: Obama, Boehner meet again

Update 12:15 p.m.: President Obama and Speaker John Boehner met in closed door talks Monday at the White House. The third such meeting so far in the fiscal cliff negotiations, discussion undoubtedly focused on concessions that Boehner delivered to the White House on Friday regarding the increase in tax rates much desired by Congressional Democrats and the administration.

While news this past weekend was sorrowfully shrouded in Friday’s tragic shooting in Newton, Conn., House Speaker John Boehner (R-Ohio) offered to the White House their much sought after tax rate increases on the top 2 percent of income earners. The offer, however, did come with the caveat that spending for entitlement programs be substantially cut.

At first, it seemed like a deal was going to go through, but reports out of the White House indicated that President Obama was not going to bite. At issue: the House Speaker’s proposal did not raise quite enough revenues, nor did it extend employment benefits, this according to Democratic sources close to the negotiations, says the Wall Street Journal.

Another aspect of this battle remains the looming debt ceiling limit, which will reached sometime early in 2013. No doubt, this will remain a potent though little noticed part of negotiations; expect it to rear its ugly head over the next couple of weeks as lawmakers come to deal with finer and finer points of their arrangement.

But, with the drastic move on the part of the GOP — to offer to cave on tax rate increases — the ball, politically speaking, is in the administration’s court with 15 days left till the nation goes off the fiscal cliff.

Some of the latest updates and analysis below:

AP: Some conservatives rebel over ‘fiscal cliff’ talks
Some conservative House Republicans are making life difficult for Speaker John Boehner as he reaches for a “fiscal cliff” pact with President Barack Obama, insisting they will oppose a deal that increases taxes. Others, however, are giving him room to negotiate, hoping he produces something they can support. With the clock ticking down on the bargaining, the “fiscal cliff” — sweeping tax increases and budget cuts that begin in January unless an accord is reached to avert them — is testing conservatives’ unity and their leverage. A year after wielding considerable clout in repeated budget clashes against the White House, two factors have weakened conservatives trying to prevent a GOP agreement with Obama that they don’t like:

Washington Times: Obama’s tax cut fig leaf
President Obama can never quite pull off the impression of being bipartisan and cooperative. When he tossed out possible corporate tax reform ideas to appear business friendly, Republican leaders weren’t impressed.  House Speaker John A. Boehner’s spokesman Michael Steel called the president’s offer “a red herring” to distract from discussing the tax hikes on small businesses that hit Jan. 1. “The White House is offering nothing new on corporate reform, other than fishing for business support to raise tax rates on individuals, small businesses and pass-through companies,” Rep. Kevin Brady, Texas Republican and member of the tax-writing Ways and Means Committee, told The Washington Times.

WaPo: Boehner offers debt-ceiling increase in cliff compromise
House Speaker John A. Boehner has offered to push any fight over the federal debt limit off for a year, a concession that would deprive Republicans of leverage in the budget battle but is breathing new life into stalled talks over the year-end “fiscal cliff.”  The offer came Friday, according to people in both parties familiar with the talks, as part of the latest effort by Boehner (R-Ohio) to strike a deal with President Obama to replace more than $500 billion in painful deficit-reduction measures set to take effect in January.

Washington Examiner: The costs of Obama’s $1.6 trillion tax hike
House Speaker John Boehner, R-Ohio, continued his slow motion cave in to President Obama this weekend, reportedly agreeing to not only raise marginal tax rates on individuals making more than $1 million a year, but also upping his total tax hike offer to $1 trillion. So much for standing on principle.  According to Politico, Boehner would immediately hike taxes by $440 billion by allowing rates on those making more than $1 million a year to rise to 39.6 percent. He’d raise another $560 billion through ‘tax reform’ implemented by Congress next year. Boehner, reportedly, is also willing “to delay a fight over the U.S. debt limit for another year.”

BloombergBusinessweek: Boehner: a dealmaker and a survivor in tight spot
It’s been just a month on the calendar but seemingly a lifetime in politics since House Speaker John Boehner got a pricey bottle of red wine from President Barack Obama as a birthday present, a feel-good image that the speaker’s aides tweeted far and wide.  The 63-year-old Ohio Republican has been caught up ever since in a monumental struggle over taxes and spending aimed at keeping the country from taking a year-end dive over the “fiscal cliff.” Obama is tugging Boehner one way in pursuit of a budget deal, while conservatives yank the other way, some howling that he’s already going wobbly on them and turning vindictive against those in his party who dare disagree.

WSJ: GOP Poses Millionaire Tax-Rate Increase
A fresh proposal from House Speaker John Boehner to raise tax rates on millionaires marked a breakthrough in stalled budget negotiations with President Barack Obama, suggesting a potential framework for avoiding year-end spending cuts and tax increases known as the fiscal cliff.  The proposal, which the speaker offered privately to Mr. Obama Friday, calls for raising $1 trillion in tax revenues over 10 years, up from the $800 billion Mr. Boehner previously proposed, and cutting about $1 trillion from spending.

CNBC: Boehner Opens the Door to Tax Hikes on the Wealthy
House Speaker John Boehner’s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end “fiscal cliff.”  The question now boils down to what President Barack Obama offers in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no spending and tax agreement is imminent.

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