President Obama has agreed to lower his demand for higher taxes on wealthy Americans to those making $400,000 and above as part of negotiations with House Speaker John A. Boehner to avoid the "fiscal cliff," sources familiar with the discussions told The Washington Times on Monday night.
In response to Republican arguments for cuts to entitlement spending, Mr. Obama has agreed to reduce future cost-of-living increases for recipients of Social Security.
The offer, which the source made clear was not the final White House position, would seek a higher tax rate for those with incomes more than $400,000, up from the levels of $200,000 for individuals and $250,000 for couples — a position the president repeatedly tried to hammer home in his successful re-election campaign.
"We view this as a good offer that shows we have met the Republicans halfway on spending and halfway on revenues," the source said.
Under the proposal, increasing taxes on those making more than $400,000 would produce $1.2 trillion in revenue, but the White House would also try to provide protections from lower-income Social Security beneficiaries, including the extension of unemployment insurance that were set to expire at the end of the year.
The president also is asking for new infrastructure spending to help stimulate the economy and is pushing for inclusion of a large amount of disaster aide to help offset the cost of super storm Sandy.
Aides to Mr. Boehner took issue with the offer, arguing that the president's package does not include enough spending cuts.
"A proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced," said Boehner spokesman Brendan Buck. "We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problems."
While the offer is a significant concession from the White House, many rank-and-file Republicans are still worried about the fallout over increasing taxes. The jockeying to reach a deal before the year-end fiscal cliff deadline is an effort by both sides to avoid automatic tax increases and across-the-board spending cuts that economists say would wreak havoc with the still struggling recovery.
The new offer comes after President Obama and Mr. Boehner met Monday at the White House for just under an hour of discussions. Though it falls short of a deal, the new concessions signify a major effort to come to an agreement on a framework for a deal in the waning days before Congress's scheduled Christmas week recess, set to begin Monday.
In addition to the concessions on the tax increases for the highest earners, Mr. Obama's latest counter-offer dropped his earlier proposal to extend a payroll tax cut due to expire Dec. 31, and he provided more savings in government spending than an earlier offer.
Mr. Boehner in his latest offer to the White House had agreed to raise the the $16.4 trillion debt ceiling without a vote by Congress. After last summer's battle over increasing the cap and the threat of the Treasury defaulting on its debts, Mr. Obama wanted to include a debt-ceiling increase in any broader budget deal.
The president has not backed down from renewed opposition to raising the Medicare eligibility age from 65 to 67, even though last year he had signified a willingness to negotiate on that point. Since then, Democrats on Capitol Hill and the AARP have voice strong opposition to including such a provision.
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