No one retreating; cliff talks seem at standstill

Pres­i­dent Barack Obama ges­tures as he speaks to work­ers about the econ­omy Mon­day dur­ing a visit to Daim­ler Detroit Diesel in Red­ford, Mich. (Asso­ci­ated Press | Paul Sancya)

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON — A year-end dead­line approach­ing, nego­ti­a­tions to avoid an economy-rattling “fis­cal cliff” appeared at a stand­still Mon­day. Repub­li­cans pressed Pres­i­dent Barack Obama to name spe­cific spend­ing cuts he will sup­port, while the White House insisted the GOP agree explic­itly to raise tax rates on upper incomes.

At a campaign-style event in Michi­gan, Obama warned his lis­ten­ers their taxes will rise on Jan. 1 with­out action by the Con­gress. “That’s a hit you can’t afford to take,” he declared.

He spoke one day after meet­ing pri­vately at the White House with House Speaker John Boehner, whose office expressed frus­tra­tion with the talks to date.

“We con­tinue to wait for the pres­i­dent to iden­tify the spend­ing cuts he’s will­ing to make as part of the ‘bal­anced’ approach he promised the Amer­i­can peo­ple,’” said a writ­ten state­ment from the Ohio Republican’s office.

The nego­ti­a­tions are designed to pre­vent across-the-board tax increases and spend­ing cuts sched­uled to begin at the turn of the year, a com­bi­na­tion that econ­o­mists say poses the threat of a new recession.

While lead­ers in both par­ties say they are eager to avoid that “cliff,” nego­ti­a­tions on a plan to cut deficits by other mea­sures have turned into a major post­elec­tion show­down between oppos­ing sides in a divided government.

Many Repub­li­cans agree that Obama and the Democ­rats hold most of the polit­i­cal lever­age, given the president’s re-election more than a month ago after a cam­paign in which he said the wealthy should pay more in taxes. Obama spoke by phone Mon­day with Sen­ate Major­ity Leader Harry Reid, D-Nev., while trav­el­ing aboard Air Force One, accord­ing to a Demo­c­ra­tic aide. The aide was not autho­rized to speak pub­licly about the pri­vate con­ver­sa­tion and thus spoke on con­di­tion of anonymity.

If any­thing, the pres­i­dent has tough­ened his demands in recent days, insist­ing not only that tax rates must rise, but also that Con­gress give him and future pres­i­dents the author­ity to raise the government’s bor­row­ing limit with­out prior approval by lawmakers.

Boehner, while claim­ing his own elec­tion man­date for the Repub­li­can major­ity in the House, said within a few days of the vot­ing he was pre­pared to buck many in his party and sup­port addi­tional tax rev­enue as part of a fis­cal cliff agreement.

The Ohio Repub­li­can has said repeat­edly he opposes Obama’s plan to raise tax rates for any­one, adding that he prefers to raise rev­enue by clos­ing loop­holes. Yet he has not yet ruled out giv­ing the pres­i­dent his way, and some Repub­li­cans have said they are pre­pared to do so — encour­ag­ing Democ­rats to say they antic­i­pate the speaker will even­tu­ally yield on the point.

White House Press Sec­re­tary Jay Car­ney told reporters as Obama went to Michi­gan that “the pres­i­dent believes that a deal is pos­si­ble. It requires accep­tance and acknowl­edge­ment in a con­crete way by Repub­li­cans that the top 2 per­cent will see an increase in their rates.”

In his remarks at the Daim­ler Detroit Diesel Plant, Obama said the Democ­rats would “make some tough spend­ing cuts on things that we don’t need” as part of his bud­get plans, although he didn’t men­tion any of them by name.

Repub­li­cans have increas­ingly expressed frus­tra­tion in recent days as they accuse Obama and the Democ­rats of fail­ing to talk in specifics when it comes to spend­ing cuts that many of their con­stituen­cies are likely to balk at.

In talks that ended in fail­ure 18 months ago, accord­ing to aides in both polit­i­cal par­ties, Obama had ten­ta­tively agreed to a pro­posal to raise the age of Medicare eli­gi­bil­ity from 65 to 67 begin­ning in a decade, and had also said he would accept a change to slow the annual cost-of-living increases that go to recip­i­ents of Social Secu­rity and other fed­eral benefits.

This time, the two sides have advanced open­ing pro­pos­als that are short of specifics and reflect dif­fer­ent priorities.

Obama’s plan would raise $1.6 tril­lion in rev­enue over 10 years, in part by rais­ing tax rates on incomes over $200,000 for indi­vid­u­als and $250,000 for couples.

He has rec­om­mended $400 bil­lion in spend­ing cuts over a decade.

He also is seek­ing exten­sion of the Social Secu­rity pay­roll tax cut due to expire on Jan. 1, a con­tin­u­a­tion in long-term unem­ploy­ment ben­e­fits and steps to help hard-pressed home­own­ers and doc­tors who treat Med­icate patients.

Boehner’s plan, in addi­tion to call­ing for $800 bil­lion in new rev­enue, envi­sions $600 bil­lion in sav­ings over a decade from Medicare, Med­ic­aid and other gov­ern­ment health pro­grams as well as $300 bil­lion from other ben­e­fit pro­grams and another $300 bil­lion from other domes­tic programs.

It would trim annual increases in Social Secu­rity pay­ments to ben­e­fi­cia­ries, and it calls for grad­u­ally rais­ing the eli­gi­bil­ity age for Medicare from 65 to 67, begin­ning in a decade.

Posted by AP News on Dec 10 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.