Obama Says He Wants Deal by Christmas to Avoid Fiscal Changes

Wednesday, 19 December 2012 01:04 PM

President Barack Obama said he offered congressional Republicans a “fair deal” during budget talks and accused them of “posturing” in negotiations.

“I have gone at least half way” and Republicans need to “take the deal” he offered, the president said today at the White House in Washington. “I’d like to get it done before Christmas.”

Obama said his plan is “as large a piece of deficit reduction as we’ve seen in 20 years” and would stabilize the federal debt and deficit for a decade. He said the proposals he and House Speaker John Boehner have advanced are “pretty close.”

Earlier today, Obama spokesman Dan Pfeiffer said the president would veto a tax proposal that Boehner plans to put to a House vote as early as tomorrow.

“Millionaires would see a tax break of $50,000, while eliminating tax cuts that 25 million students and families struggling to make ends meet depend on,” Pfeiffer said in a statement today. The plan would “deeply” cut Medicare, he said, adding that the president would veto it “in the unlikely event” the measure passed Congress.

The White House said in a statement that Boehner’s Plan B proposal would do nothing to avoid January’s spending cuts. Other consequences would be to end unemployment insurance benefits for 2 million people searching for jobs.

Boehner’s “Plan B” would raise tax rates on annual income exceeding $1 million, rather than the $400,000 threshold the president proposed in his latest offer.

Unless Congress acts, more than $600 billion in tax increases and spending cuts will begin next month. Boehner is looking to pressure Obama to accept deeper spending cuts and a higher threshold for rate increases by showing how hard it will be to win Republican support for any tax increase.

No talks have occurred between the White House and congressional Republicans since Boehner and Obama met Dec. 17, administration officials said in a background briefing for reporters today.

Brendan Buck, a Boehner spokesman, said the White House’s opposition to Boehner’s plan “is growing more bizarre and irrational by the day.” In an e-mailed statement, Buck said if Democrats “disapprove of this bill, then there is a simple solution: Amend it in the Senate and send it back to the House.”

Putting Republicans on record in support of a higher rate for some top earners might insulate Boehner and his party from blame if no deal is reached and taxes rise starting Jan. 1 as part of the so-called fiscal cliff.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said today that Obama has squandered the chance to craft a broader solution with Republicans.

“Speaker Boehner, like me, would like to prevent a tax hike on everyone,” McConnell said on the Senate floor. “But given the president’s failure to act, the House will soon vote on legislation to prevent a tax hike on anyone making less than a million dollars a year, rather than letting taxes go up on every American taxpayer.”

Administration officials said Boehner’s plan has made it tougher to work out a deal before January, though they denied that it’s putting pressure on the White House. They said most Republicans, except for a handful, haven’t voted for tax increases in about 20 years and Boehner will have to push to get support from his own party.

Also today, the anti-tax group Americans for Tax Reform said Boehner’s proposal to let tax cuts expire on annual income exceeding $1 million doesn’t break the anti-tax pledge most Republicans have taken. The group is led by Grover Norquist, author of the pledge.

Republicans say the bill’s “sole purpose” is to prevent tax increases, the group said. “It is extremely difficult -- if not impossible -- to fault these Republicans’ assertion.’’

There are no talks on raising the debt ceiling, said officials who spoke on condition of anonymity to provide the administration’s views. When that comes up next year, the White House plans to let Republicans grapple with it and the administration won’t participate in negotiations, an official said.

Boehner signaled openness on Dec. 14 to tax rate increases on income of more than $1 million, marking progress in his talks with Obama.

The speaker’s proposal would permanently extend current tax rates on income of less than $1 million a year and prevent the expansion of the alternative minimum tax. Based on studies of previous proposals, the bill would raise between $300 billion and $400 billion over the next decade, though an official estimate wasn’t available as of last night.

The plan would set tax rates for capital gains and dividends at 20 percent on income higher than $1 million. A tax already set to take effect in 2013 would push the total top rate on investments to 23.8 percent. The bill would continue current estate-tax rules that set the per-person exemption at $5.12 million, indexed for inflation, with a top rate of 35 percent.

Getting the votes to pass Boehner’s proposal in the Republican-led House won’t be easy. For years, most Republican lawmakers have opposed any tax increases. Democrats have said they will oppose the Boehner measure, dismissing it as a political ploy that falls short of generating enough revenue.

Ohio Representative Jim Jordan, chairman of a House Republican group that promotes small government, said yesterday it was “a mistake for the Republican Party” to endorse higher tax rates for anyone. Meanwhile, House Minority Leader Nancy Pelosi, a California Democrat, predicted that her caucus members “would be unified in rejecting” Boehner’s proposal.

Following a closed-door session last night in which Boehner attempted to sell his plan, Minnesota Republican Representative John Kline said “there is an understanding” that “absent action, we are going to be faced with a huge, huge tax hike.”

A vote on Boehner’s proposal also could provide him with political cover within his caucus to eventually back a revised agreement with Obama that would require more Democratic votes.

Some lawmakers expressed concern over having a separate vote, as House leaders are considering, on extending tax cuts for those earning under $250,000 a year, Representative Mike Coffman, a Colorado Republican, said in an interview.

Obama’s original negotiating position called for a tax-cut extension to apply below the $250,000 mark.

Fifty-three percent of Americans say the country will experience major economic problems if no deal is reached, according to a CBS News poll conducted Dec. 12-16. The poll showed that 47 percent blame Republicans in Congress for gridlock, compared with 24 percent who put the onus on Obama and other Democrats.

The survey of 1,179 adults had a margin of error of plus- or-minus three percentage points.

The American Payroll Association asked the Treasury Department in a Dec. 17 letter to freeze paycheck withholding at 2012 levels while Congress continues to debate the 2013 rates. Treasury, which has the authority to set tables, hasn’t responded, the group said.

The Standard & Poor’s 500 Index lost 0.2 percent to 1,443.58 at 12:05 p.m. in New York. The benchmark index has gained 15 percent so far this year. The Dow Jones Industrial Average slipped 24.27 points, or 0.2 percent, to 13,326.69 today. The benchmark 10-year Treasury bond yield fell three basis points, or 0.03 percentage point, to 1.79 percent at 11:56 a.m. New York time after touching 1.83 percent earlier, according to Bloomberg Bond Trader prices.

Representative Mick Mulvaney of South Carolina and several other Republicans leaving a party meeting last night wouldn’t comment.

“I’m just tired of talking about it,” Mulvaney said. “I’d rather talk about golf.”

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President Barack Obama said he offered congressional Republicans a fair deal during budget talks and accused them of posturing in negotiations. I have gone at least half way and Republicans need to take the deal he s offered, the president said today at the White...
Wednesday, 19 December 2012 01:04 PM
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