WASHINGTON – House Speaker John Boehner said Friday there has been no progress in negotiations to avert a “fiscal cliff” combination of automatic tax increases and spending cuts in January and called on President Barack Obama to produce a new offer.
Hours later, Vice-President Joe Biden again laid out the White House’s terms: raise the top two tax rates paid by upper-income earners and give the president authority to raise the government’s borrowing cap without the approval of Congress.
“Top brackets have to go up. The top rate should go to 39.6 per cent,” Biden said, referring to the top Clinton-era tax rate. Obama campaigned on raising tax rates on individual income exceeding $200,000 and family income over $250,000, and he’s claiming his re-election as a mandate to insist on it. Republicans are offering new tax revenues through closing loopholes and curbing deductions.
Biden allowed that the White House is willing to negotiate over rates — even as he pressed a new administration demand for authority for Obama to unilaterally raise the national debt and avoid a reprise of the debt crisis of a year and a half ago.
“We have to have a mechanism to stop the brinkmanship for dealing with the national debt,” Biden said.
Boehner’s frustration seems to be mounting. He said that the White House has wasted another week and has failed to respond to Monday’s GOP offer to raise tax revenues and cut spending. Obama and Boehner spoke privately by phone on Wednesday. Boehner described the conversation as pleasant “but just more of the same.”
Senate Minority Leader Mitch McConnell, R-Ky., was downbeat Friday about prospects for striking a deal before year’s end.
“I’d love to tell you that privately it’s a lot better; you know — that’s just public posturing,” McConnell said in Louisville at the Kentucky Farm Bureau’s convention. “Privately, it isn’t any better. …I think what his problem is, he’s having a hard time turning off the campaign.”
On Thursday, two Boehner aides met with a top White House official in the Capitol for a discussion that Republicans said produced no progress.
These officials said presidential aide Rob Nabors insisted that Boehner agree to the president’s demand for an increase in the tax rate on upper incomes, and also bow to Obama’s wishes for presidential authority to raise the government debt limit without prior approval by Congress. The officials spoke on condition of anonymity because the discussions were private.
Biden spoke with reporters after having lunch at a Northern Virginia diner with seven people identified by the White House as middle-class Americans who would be affected by a tax hike. Repeating an attack line increasingly used by Democrats, Biden said Republicans shouldn’t “hold hostage the relief for the middle class” in order to protect tax cuts for upper-income people.
Biden said it would take “15 minutes” for a bill to get done if Boehner agreed to let taxes on the wealthy go up. It could be done “like that,” Biden said, snapping his fingers.
Boehner complained that “there’s been no counteroffer from the White House” since the GOP plan was delivered on Monday. “Instead, reports indicate that the president has adopted a deliberate strategy to slow-walk our economy right to the edge of the fiscal cliff.”
Boehner singled out for criticism White House aides and Treasury Secretary Tim Geithner, who have said Obama was willing to allow Bush-era tax cuts for everyone to expire on Jan. 1 and automatic, across-the-board spending cuts to kick in the next day. He called their comments “reckless talk.”
But Boehner declined an opportunity to take a hard line on tax rates, skirting a direct question on whether he might be willing to accept some increase in the top tax rate, currently set at 35 per cent.
“There are a lot of things that are possible to put the revenue that the president seeks on the table. But none of it’s going to be possible if the president insists on his position — insists on ‘my way or the highway,'” Boehner said when asked whether he might be able to accept a compromise top rate of 37 per cent. “That’s not the way to get to an agreement.”
The Republican leader pointed out that he had offered on Monday to raise tax revenues by $800 billion over the next decade by ending or reducing tax breaks, particularly on the wealthy. The Republican plan would cut spending by $1.4 trillion, including by trimming annual increases in Social Security payments and raising the eligibility age for Medicare from 65 to 67.
“When is he going to take a step toward us?” Boehner asked of Obama.
At the White House, officials used Friday’s mixed jobs report, with its modest growth in hiring, as an argument to embrace Obama’s plans to avoid the fiscal cliff with a package of rate hikes for the rich, public works spending and refinancing help for struggling homeowners.
“Most pressing, President Obama has proposed, and the Senate has passed, an extension of middle-class income tax cuts that would prevent the typical middle-class family from facing a $2,200 tax increase at the beginning of next year,” said Alan Krueger, chairman of Obama’s Council of Economic Advisers.
Obama met at the White House on Friday with top House Democrat Nancy Pelosi, discussing a number of issues, including the fiscal cliff, a White House official said.
Taxe cuts enacted during President George W. Bush’s first term are scheduled to expire Dec. 31, automatically boosting tax rates to levels in place under President Bill Clinton. Obama wants those increases only to affect households with earnings of more than $250,000.
Obama is insisting that rates for upper income taxpayers rise and also wants permanent authority to prevent Congress from blocking increases in the nation’s borrowing limit. The government is on track to hit its $16.4 trillion debt ceiling later this month, though the Treasury could extend the day of reckoning to February.
Separately, Pelosi, D-Calif., called on GOP leaders to schedule a vote on Senate-passed legislation to hike the top two tax rates for individual income exceeding $200,000 and family income over $250,000.
“Why are you not bringing this to the floor?” Pelosi said. “Is this a forever, forever protection of the wealthiest people in the country at the expense of the middle class?”
Associated Press writers Matthew Daly in Arlington, Va., and Bruce Schreiner in Louisville, Ky., contributed to this report.