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Boehner’s ‘fiscal cliff’ bargaining stirs some uneasiness

Budget hawks wary of proposal

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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."

Boehner spokesman Michael Steel did not respond to questions about whether Mr. Boehner was double-counting the savings.

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.

Conservatives have watched Mr. Boehner's negotiations with trepidation as he has agreed to hefty tax increases, including raising rates — something the GOP had repeatedly ruled out.

And now they fear by using some of the new spending cuts to replace the sequesters, and still counting that as new cuts for purposes of a future debt increase, he'll end up double-counting.

"Replacing the sequester does not count as a concession Speaker Boehner can claim that he extracted from the president as far as we are concerned," said Barney Keller, spokesman for the Club for Growth, a group that opposes big government spending. "Those are spending cuts that were going to happen anyway.

"Certainly, if all you are doing is replacing the sequester, which is already in law, then all you are really doing is giving the president a clean debt-limit increase," Mr. Keller said.

Tim Phillips, president of Americans for Prosperity, said it looks like they "are clearly backing away from the near-term cuts in federal spending that they promised to the American people back when they did the last debt deal."

Mr. Boehner's plan would raise $1 trillion through a combination of higher taxes on millionaires and eliminating loopholes in the tax code. It also calls for $1 trillion in spending cuts.

Mr. Obama, meanwhile, had maintained that any fiscal cliff deal must start with higher taxes on individuals making $200,000 or more a year and families making at least $250,000 a year.

White House spokesman Jay Carney told reporters Monday that Mr. Boehner's latest proposal did not pass the litmus test for the "balance" between tax increases and spending cuts.

"Thus far, the president's proposal is the only proposal that we have seen that achieves the balance that's so necessary," Mr. Carney said. "And the balance is important because a plan that does not have it puts, unduly, the burden on senior citizens — or on middle-class Americans or on parents with disabled children."

Mr. Carney also said Mr. Obama is willing to make "tough choices" on spending cuts.

"Any potential agreement would not only have to align with the president's principles, it would require tough choices by both sides, including the president and including Republicans, and that's the only way it can come together," he said.

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