- Associated Press - Wednesday, December 12, 2012

WASHINGTON — House Speaker John Boehner said Wednesday that “serious differences” remain between him and President Barack Obama in negotiations on averting automatic spending cuts and tax increases that economists say could send the U.S. economy over a “fiscal cliff.”

Boehner’s comments came as top Democrats pushed back on GOP demands for tough steps such as raising the Medicare eligibility age and curbing the cost-of-living adjustment for Social Security.

Boehner and 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 continues to insist that much of the revenue come from raising top tax rates on the wealthy.

Boehner countered later Tuesday with another offer that GOP aides 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. A Democratic official said Boehner’s counter-offer included permanent extension of Bush-era tax rates for all taxpayers including the top 2 percent of earners, the same as his earlier proposal. Boehner offers $800 billion in new revenues through a tax reform measure next year. The officials spoke only on condition of anonymity because they were not authorized to describe the private talks.


Boehner on Wednesday offered a sour assessment less than three weeks before the cliff deadline. The changes would strike the economy with $500 billion worth of spending cuts and higher tax rates if left in place through September.

“There were some offers that were exchanged back and forth yesterday and the president and I had pretty frank conversations about just how far apart we are,” the Ohio Republican said after a closed-door meeting with fellow GOP lawmakers in which he advised them not to make plans for the week after Christmas.

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.

Obama met Wednesday with nine mayors from around the country and spoke to more on a conference call about the fiscal cliff. Following the meeting, the mayors said it was important for Congress to come to agreement with the White House on a “balanced approach.”

Columbus, Ohio, Mayor Michael Coleman said he did not “detect frustration” in Obama during the meeting. “But I can tell you that we’re frustrated, and I think America is becoming frustrated. I think those in Ohio are becoming frustrated and those in Columbus are becoming frustrated because it seems this can be done, that we can forge an agreement with Congress that will result in tax cuts for the middle class.”

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.

House Minority Leader Nancy Pelosi, meanwhile, warned Republicans against insisting on raising the Medicare eligibility age as part of any deal.

“One of the things that we object to is raising the Medicare age,” Pelosi said on “CBS This Morning.” ”Don’t go there.”

Pelosi said raising the retirement age wouldn’t contribute much savings toward an agreement, adding “Is it just a trophy that the Republicans want to take home?”

Raising the Medicare age from 65 to 67 could cut Medicare costs by $162 billion over a decade, according to a Congressional Budget Office estimate last year. But by 2035, it would cut Medicare’s projected budget by 7 percent.

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