House Speaker John A. Boehner’s latest “fiscal cliff” offer to the White House has budget hawks fearing he is preparing to break his promise to deliver a dollar in spending cuts for every dollar increase in the nation’s borrowing limit.
President Obama and Mr. Boehner huddled for 45 minutes Monday at the White House, marking the first time they have met face to face since the Ohio Republican floated a proposal over the weekend to raise $1 trillion in taxes, cut $1 trillion in spending and use some of the proposed savings to replace the automatic spending cuts looming next year.
Part of the deal Mr. Boehner offered, though, would give the president another raise in the debt ceiling, in exchange for the spending cuts — which budget hawks said amounts to double-counting because the president already earned a debt-ceiling increase last year for that same money.
“The sequester is current law,” said Robert L. Bixby, executive director of the Concord Coalition, a bipartisan budget-watchdog group. “So if you are replacing that, you are not getting more savings, you are just getting savings in a different form.”
Mr. Boehner has insisted that any increase in the federal debt ceiling — which now sits at $16.4 trillion — must be matched dollar for dollar with reductions in spending.
With the end-of-year deadline approaching, negotiations are heating up. On Monday, the White House presented Mr. Boehner with a counteroffer that would raise tax rates beginning at $400,000 of income — in between the president’s $200,000 demand and the $1 million threshold Mr. Boehner offered over the weekend.
Mr. Obama also agreed to use a lower rate of inflation to calculate cost-of-living adjustments for Social Security and other federal programs, though he has not agreed to the GOP’s demand to raise the eligibility age for Medicare from 65 to 67, according to The Associated Press.
Mr. Steel praised the overture, but said it isn’t enough.
“Any movement away from the unrealistic offers the president has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced,” the spokesman said. “We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem.”
Mr. Obama and Mr. Boehner now are rushing to hammer out a deal before the end of the year. Across-the-board tax increases are scheduled for Jan. 1, a day before $110 billion in automatic spending “sequesters” resulting from last year’s debt deal.
That debt deal involved $1 trillion in savings from immediate caps on discretionary spending and another $1.2 trillion in automatic cuts spread over 10 years — in exchange for opening the door for a $2.1 trillion increase in the nation’s debt ceiling.
Under the deal, a bipartisan deficit-reduction committee was tasked with coming up with the additional $1.2 trillion in spending reductions, including in entitlements and tax reforms.
The committee, though, failed to reach a bipartisan agreement, setting up the sequesters to take effect next month. The situation is prompting warnings from economists that sequesters — along with the expiring George W. Bush-era tax cuts — could send the nation into a sharp recession.View Entire Story
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