CNN International | - |
Washington
(CNN) -- Public posturing or possible stalemate? Continued sniping by
both sides in the fiscal cliff negotiations shows little movement on the
core issue - higher taxes on the wealthy.
Fiscal cliff talks still hung up on taxes
updated 12:36 PM EST, Wed December 12, 2012
STORY HIGHLIGHTS
- Speaker Boehner calls his talks with President Obama "deliberate" and "frank"
- Source: Republicans still refuse Obama's call for higher tax rates on the top brackets
- House leaders say they will work until the end of the year for an agreement
- Without a deal, the nation faces tax hikes and spending cuts on January 1
House Speaker John
Boehner chose different language on Wednesday to describe his latest
talks with President Barack Obama, calling a phone call the night before
"deliberate" and "frank."
That contrasted to his use of "cordial" in labeling the previous discussion between the two men on Sunday.
Such a seemingly minor shift can speak volumes in the roller-coaster reality of Washington brinksmanship.
Boehner clearly sought to
indicate little progress in the negotiations on an agreement to reduce
chronic federal deficits and debt.
However, the latest talks
involved counteroffers by both sides that included two shifts by the
White House. Democratic sources said Obama lowered his revenue demand
from $1.6 trillion to $1.4 trillion, but also added changes to the corporate rate to his proposal involving income taxes.
No further details were
available, but Boehner sounded unimpressed. He told reporters that
Obama's latest stance remained far from a deal that he could accept or
would win approval from the House and Senate.
"There were some offers
that were exchanged back and forth yesterday," he said, adding that "the
president and I had some pretty frank conversation about how far apart
we are."
In particular, the Ohio
Republican said that Obama's proposal fails to offer a balance between
increased tax revenue and spending cuts promised by the president.
"In the five weeks since
we've signaled our willingness to forge an agreement with the
president, he's never put forth a plan that meets these standards,"
Boehner said. " And frankly, it's why we don't have an agreement today."
The White House and
congressional Democrats reject the Republican contention that the
president has yet to offer serious spending cuts and reforms to
entitlement programs such as Medicare, Medicaid and Social Security as
part of a comprehensive deal.
Instead, they insist
that Boehner and Republicans agree to Obama's demand to extend current
tax rates for most Americans while allowing rates to increase to 1990s
levels on the top two income brackets.
That would address the
main concern of the fiscal cliff, a set of automatic tax hikes and
spending cuts that will begin on January 1 without an agreement between
Obama and Boehner.
While Republicans have
offered to increase tax revenue by eliminating some deductions and
loopholes, they so far refuse to accept any increase in tax rates as
demanded by the president.
A Democratic source told
CNN that the latest Republican offer included extending all the
Bush-era tax cuts set to expire at the end of the year, including rates
on the top income brackets.
According to the source,
that signaled to Democrats that Boehner and Republicans were "unwilling
or unable to do any sort of deal that can pass the Senate or be signed
by the president."
Obama campaigned on
higher taxes on the wealthy in winning re-election last month, and he
and Democrats say Republicans must concede on that issue for an
agreement to happen.
In an interview on
Tuesday with ABC News, Obama said that he was "pretty confident"
Republicans would relent on taxes in order to get a deal.
But the White House also
complains that Republicans have yet to offer details on which
deductions or loopholes they would eliminate to raise revenue.
Senate Democratic leader
Harry Reid said Wednesday that Republican talk is meaningless until
they show a genuine commitment to include significant revenue in any
agreement.
"The American people are
not going to be under the illusion that the Republicans are sometime in
the future going to come up with revenue," Reid said. "They are going
to come up with raising the rates" or "we are going over" the fiscal
cliff.
Time is running out for
an agreement on a short-term deal to avert the fiscal cliff and set up
further negotiations in the new Congress that convenes in January or a
more comprehensive approach that both sides say they want.
Without a deal,
everyone's taxes go up and the government faces deep spending cuts,
including for the military. However, the administration has signaled it
can delay some of the effects to allow time to work out an agreement
next year.
The House is supposed to
end its current session on Friday and go home for the year, but
Majority Leader Eric Cantor made clear the chamber would stay later than
planned.
"We are going to stay
here right up to Christmas Eve, throughout the time and period before
the New Year, because we want to make sure we resolve this in an
acceptable way for the American people," Cantor said Wednesday.
With a deal needing time
to be written into legislation and approved by Congress, the working
deadline for an agreement this year is around Christmas Day at the
latest.
"You`re talking about
having to have something done by Christmas, but the sooner the better,"
Rep. Chris Van Hollen, D-Maryland, told MSNBC on Tuesday.
Polls consistently show the public favors Obama's stance in the negotiations.
Nearly half of Americans
-- 49%--say they approve of the president's handling of the talks,
compared to 25% who say Boehner is doing a good job, according to a new
ABC News/Washington Post poll released Wednesday.
Meanwhile, a new
Bloomberg National Poll indicated that nearly two-thirds of respondents,
including nearly 50% of Republicans, believe Obama's re-election gave
him a mandate to seek higher taxes on the wealthy.
Also Wednesday, an
administration official said the Business Roundtable --an association of
CEOs of major corporations -- has dropped its opposition to raising tax
rates on the top two tax brackets after lobbying by the White House.
Despite Boehner's
adamant stance against such a tax rate hike, some cracks have appeared
in his party's anti-tax facade, prompting a conservative backlash.
Sen. Lindsey Graham,
R-South Carolina, promised the newly re-elected Obama "one hell of a
fight" next year if the president forces through his plan for
high-income earners to pay more taxes without agreeing to substantive
steps to reduce the nation's chronic federal deficits and debt.
"There will come a time
in February and March where we have to raise the debt ceiling," Graham
said Tuesday on "Piers Morgan Tonight" on CNN. "I will not raise the
debt ceiling ever again until we get significant entitlement reforms,
because if we don't reform entitlements, we're going to become Greece."
House Democratic leader
Nancy Pelosi argued that more than $1 trillion in spending cuts agreed
to by Congress in the past two years should be counted toward deficit
reduction in the current negotiations.
Obama has held a
campaign-style series of public events to back his call for extending
Bush-era tax cuts for 98% of Americans while allowing rates to return to
higher 1990s levels on income over $250,000.
Both sides call for
eliminating tax deductions and loopholes to raise more revenue, but
Obama also demands an end to the tax cuts of 2001 and 2003 for the top
brackets.
Republicans oppose the
return to higher rates, saying it will inhibit job growth because small
business owners declare their profits as personal income and therefore
would face a tax increase.
In response, Obama and
Democrats note that their plan -- already approved by the Senate and
needing House approval to be signed into law by the president -- affects
just 2% of taxpayers and 3% of small business owners.
While Republicans argue
those small business owners account for about half of all business
income, Democrats say that's because they include law firms, hedge funds
traders and other high-income operations.
Retiring Sen. Kent Conrad, D-North Dakota, predicted Tuesday on MSNBC that a deal would get worked out in a week's time.
"It would be wise on
their part not to come too quickly with a deal because that would give
all the interest groups a chance to get organized and try to kill it,"
Conrad said. "And we know that on the right, on the left, special
interest groups are just salivating at the chance to attack any
agreement because, look, any agreement is going to have controversy
attached to it."
CNN's Paul Steinhauser, Deirdre Walsh, Jessica Yellin and Ashley Killough contributed to this report.
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