Wednesday, December 4, 2013
By LORI MONTGOMERY and PAUL KANE The Washington Post
WASHINGTON - President Obama offered Republicans a detailed plan Thursday for averting the year-end "fiscal cliff," calling for $1.6 trillion in new taxes, $50 billion in fresh spending on the economy and an effective end to congressional control over the size of the national debt.
Speaker of the House John Boehner, R-Ohio, speaks to reporters after private talks with Treasury Secretary Timothy Geithner on the fiscal cliff negotiations, at the Capitol in Washington, Thursday, Nov. 29, 2012. "No substantive progress has been made between the White House and the House" in the past two weeks, Boehner said. The “fiscal cliff” is a combination of tax increases and spending cuts worth about $670 billion that will take effect at the start of next year unless Congress and the White House agree to postpone or replace them. (AP Photo/J. Scott Applewhite)
The proposal, delivered to the Capitol by Treasury Secretary Timothy Geithner, mirrors previous White House deficit-reduction plans and satisfies Democrats' demands that negotiations begin on terms dictated by the newly re-elected president.
The offer lacks any concessions to Republicans, most notably on the core issue of where to set tax rates for the wealthiest Americans. After two weeks of talks between the White House and aides to House Speaker John Boehner, R-Ohio, it seemed to take Republicans by surprise.
Boehner quickly rejected the proposal. After meeting with Geithner for about 45 minutes Thursday morning, the speaker announced his frustration with a negotiation process in which nearly three weeks have lapsed since the election.
"No substantive progress has been made" in the two weeks since Obama welcomed congressional leaders at the White House, Boehner told reporters. "I'm disappointed in where we are, and disappointed in what's happened over the last couple weeks.
"Going over the fiscal cliff is serious business. And I'm here seriously trying to resolve it. And I would hope the White House would get serious as well."
Senate Minority Leader Mitch McConnell, R-Ky., called the proposal a "step backward" from compromise.
Democratic leaders, meanwhile, were triumphant after receiving similar briefings from Geithner and White House legislative liaison Rob Nabors. Top Democrats have insisted for months that an Obama victory would entitle them to demand far more in new taxes than Republicans have been willing to consider, to seek new measures to boost economic growth, and to avoid major cuts to entitlement programs such as Social Security and Medicare.
"Democrats are on the same page," said Senate Majority Leader Harry Reid, D-Nev. "The president has made his proposal; we need a proposal from them."
Although the White House offer seemed to startle Republicans, it contains little that would be unfamiliar to anyone following the president's recent public statements. The exception was his proposal on the federal debt limit. Republican aides said Obama is seeking to permanently enact procedures that were temporarily adopted in the summer of 2011 and would allow the White House to unilaterally increase the debt ceiling unless two-thirds of lawmakers disapprove.
That process, initially proposed by McConnell, was not intended to become permanent. By trying to make it so, Obama is seeking to avoid another damaging battle over the debt ceiling that would again risk a national default. This change, however, would also deprive Congress of its historic authority over federal borrowing.
Unless Congress acts on the fiscal cliff, taxes will rise significantly in January for nearly 90 percent of Americans, and about $65 billion will be sliced from the budgets of the Pentagon and other agencies, probably triggering a recession. Simply canceling the changes, however, risks undermining confidence in the nation's ability to manage its rising debt.
Obama's proposal, as outlined by Republicans, would purportedly trim the debt by about $4 trillion over the next decade, in part through spending cuts already in force and savings from ending the wars in Iraq and Afghanistan. Also included are $1.6 trillion in taxes and about $400 billion in savings from changes to federal health and entitlement programs.
With regard to taxes, the White House wants about $1 trillion in new revenue from the year-end expiration of the George W. Bush-era tax cuts on income over $250,000. Obama also is demanding that dividends be taxed as normal income, and that the estate tax be raised to 45 percent and expanded to cover estates worth as little as $3.5 million -- policies for which the Democratic Senate was unable to win approval earlier this year.