WASHINGTON – For the first time since the Nov. 6 election, partisan bickering trumped bargaining Thursday as Democrats and Republicans vied for the political high ground in talks to avoid year-end tax increases and spending cuts that threaten harm to middle class pocketbooks.
“No substantive progress has been made between the White House and the House” over the past two weeks toward averting the “fiscal cliff,” House Speaker John Boehner declared after a private meeting with Treasury Secretary Tim Geithner in the Capitol.
“Unfortunately, many Democrats continue to rule out sensible spending cuts that must be part of any significant agreement that will reduce our deficit.”
Democrats said any holdup was the fault of Republicans, who are balking at President Barack Obama’s plan to raise tax rates on incomes higher than $200,000 for individuals and $250,000 for couples.
Republican aides later said Geithner had proposed passage by year’s end of tax increases totalling $1.6 trillion over a decade, including the rate hikes sought by Obama.
They said the White House is also seeking year-end approval for an unspecified amount of new spending to renew expiring jobless benefits, help homeowners hit by the real estate collapse and prevent a looming Jan. 1 cut in fees for doctors who treat Medicare patients.
The GOP said the White House was offering unspecified spending cuts this year. Those would be followed next year by legislation producing savings from Medicare and other benefit programs of up to $400 billion over a decade, a companion to an overhaul of the tax code.
At his news conference, Boehner, R-Ohio, blamed the White House and members of Obama’s party for refusing to propose detailed savings from the government’s huge benefit programs.
Senate Majority Leader Harry Reid rebutted moments later. “We’re still waiting for a serious offer from Republicans,” the Nevada Democrat said at a news conference. He noted that GOP leaders have refused the president’s call to extend expiring tax cuts for the middle class while letting them lapse at upper incomes.
At the White House, presidential press secretary Jay Carney said flatly, “There can be no deal without rates on top earners going up.”
Taking a confrontational, at times sarcastic tone, he said, “This should not be news to anyone on Capitol Hill. It is certainly not news to anyone in America who was not in a coma during the campaign season.”
The White House also circulated a memo that said closing loopholes and limiting tax deductions — a preferred Republican alternative to Obama’s call to raise high-end tax rates — would be likely to depress charitable donations and wind up leading to a middle class tax increase in the near future.
With barely a month remaining until year’s end, the hardening of positions seemed more likely to mark a transition into hard bargaining rather than signal an end to efforts to achieve a compromise on the first postelection challenge of divided government.
Boehner suggested as much when one reporter asked if his comments meant he was breaking off talks with the White House and congressional Democrats.
“No, no, no. Stop,” he quickly answered.
“I’ve got to tell you, I’m disappointed in where we are, and disappointed in what’s happened over the last couple weeks. But going over the fiscal cliff is serious business.”
At issue is a bipartisan desire to prevent the wholesale expiration of Bush-era tax cuts and the simultaneous implementation of across-the-board spending cuts. The potential spending reductions, to be divided between military and domestic programs, were locked into place more than a year ago in hopes the threat would have forced a compromise on a deficit reduction deal before now.
Economists in and out of government warn that sending the economy over the “cliff” would trigger a recession.
To avoid the danger, Obama and Congress are hoping to devise a plan that can reduce future deficits by as much as $4 trillion in a decade, cancel the tax increases and automatic spending cuts and expand the government’s ability to borrow beyond the current limit of $16.4 trillion.
In the first few days after the elections, Boehner said he was willing to accept a deal that included new revenues, a long-time Democratic demand, and Obama has said he will sign on to savings from Medicare, Medicaid and other benefit programs that Democrats have long defended from proposed Republican cuts.
At the same time, both sides have worked to tilt the bargaining table to their advantage. As part of that effort, Obama travels to Pennsylvania on Friday to campaign for his tax proposal.
Boehner, who will begin a second term as House speaker early next month, has appealed to his rank and file to remain united. At a closed-door meeting this week, he displayed polling data that showed the public would rather see loopholes closed than rates raised as a means of raising revenue for the government.
Speaking with reporters after his closed-door session with Geithner, Boehner accused the president of holding “campaign-style rallies” rather than engaging in serious bargaining.
Reid, too, cited polls, saying the public favours the sort of balanced approach to deficit cutting, tax increases included, that Obama backed in his race against Republican Mitt Romney.
Polls of voters taken as they left their polling places on Nov. 6 showed 60 per cent said taxes should go up on income over $250,000 or for everyone, including 77 per cent of Democrats, 42 per cent of Republicans and 59 per cent of independents.
At the same time, 63 per cent said that taxes should not be increased to reduce the federal budget deficit, a view shared by 50 per cent of Democrats, 62 per cent of independents and 81 per cent of Republicans.
“Republicans know where we stand,” Reid said at his news conference. “We’re still waiting for a serious offer from Republicans.”
Sen. Chuck Schumer, D-N.Y., was more emphatic.
Referring to a meeting at the White House more than a week ago, he said both sides agreed to a two-part framework that would include a significant down payment in 2012, along with a plan to expand on the savings in 2013.
“Each side said they’d submit a down payment. We have. Our preference is revenue. What is theirs?” he said, speaking of the Republicans.
In addition to sessions with Boehner and Reid, Geithner also met during the day with Senate Republican Leader Mitch McConnell and top House Democrats.
Said McConnell, in a statement: “To date, the administration has remained focused on raising taxes and attending campaign-style events, with no specific plans to protect Medicare and Social Security or reduce our national debt in a meaningful way.” He added, “And today, they took a step backward, moving away from consensus and significantly closer to the cliff.”
Associated Press writers Jim Kuhnhenn, Julie Pace, Alan Fram, Stephen Ohlemacher and Andrew Taylor contributed to this story.