Of­fi­cials say GOP of­fered no specifics

Bud­get

Austin American-Statesman - - THE SECOND FRONT - A HIGH­LIGHTS OF THE ‘FIS­CAL CLIFF’ as­so­ci­ated PRESS

to ex­tend the tax cuts on an­nual house­hold in­come be­low $250,000 but not for in­come above that level, as the pres­i­dent vowed in his re-elec­tion cam­paign.

“There’s just no rea­son why 98 per­cent of Amer­i­cans have to see their taxes go up be­cause some mem­bers of Congress on the Repub­li­can side want to block tax rate in­creases for 2 per­cent of the wealth­i­est Amer­i­cans,” Gei­th­ner said. “Re­mem­ber, those tax rates, those tax cuts, cost a tril­lion dol­lars over 10 years.”

“Those rates are go­ing to have to go up,” he added. “That’s an es­sen­tial part of a deal.”

The tele­vised joust­ing re­flected the po­lit­i­cal pos­tur­ing that is typ­i­cal in the early stages of Washington bud­get ne­go­ti­a­tions, with lead­ers of each party seek­ing to per­suade the pub­lic of the right­ness of its po­si­tion and to bring pres­sure on the other side to com­pro­mise. Gei­th­ner gave in­ter­views to all five ma­jor Sun­day shows, and Boehner in turn re­quested time on Fox late last week.

But the White House and Congress do not have much time for the usual ne­go­ti­at­ing games, with the year-end dead­line loom­ing and the hol­i­days ap­proach­ing. Ab­sent a deal of­fer­ing an alternative, across-the-board cuts in domestic and mil­i­tary pro­grams and im­me­di­ate tax in­creases for all Amer­i­cans — the re­sult of the ex­pi­ra­tion of the Bush-era tax cuts — would take ef­fect in Jan­uary. To­gether, the The‘fis­cal cliff’is an econ­omy-rat­tling com­bi­na­tion of ex­pir­ing tax cuts and ma­jor across-the-board spend­ing re­duc­tions to the Pen­tagon and domestic pro­grams, in­clud­ing:

The ex­pi­ra­tion of Ge­orge W. Bush-era tax cuts on in­come, in­vest­ments, mar­ried cou­ples and fam­i­lies with chil­dren and in­her­i­tances. In ad­di­tion, some 26 mil­lion ad­di­tional face the alternative min­i­mum tax next fil­ing sea­son, which would raise their taxes by an av­er­age of $3,700. Cost through Septem­ber: $330 bil­lion.

A $55 bil­lion, 9 per­cent cut in the de­fense bud­get next year and an­other $55 bil­lion in cuts to domestic pro­grams, in­clud­ing a 2 per­cent cut to Medi­care providers.

The ex­pi­ra­tion of un­em­ploy­ment ben­e­fits for the long-term job­less. Cost: $26 bil­lion.

A sharp cut in re­im­burse­ments for doc­tors par­tic­i­pat­ing in Medi­care. Cost: $11 bil­lion.

The ex­pi­ra­tion of Obama’s tem­po­rary 2 per­cent­age point cut in pay­roll taxes. Cost: $95 bil­lion.

A va­ri­ety of smaller taxes cuts for both busi­nesses and in­di­vid­u­als col­lec­tively known as tax‘ex­ten­ders.’They in­clude a tax credit for re­search and devel­op­ment and a de­duc­tion for sales taxes in states that don’t have an in­come tax. Cost: about $65 bil­lion.

A need to in­crease the government’s bor­row­ing cap (the so-called debt limit) of $16.4 tril­lion. The government is ex­pected to hit the cap late this year but the Trea­sury De­part­ment has the author­ity to jug­gle cer­tain ac­counts to buy sev­eral more weeks of time so that Congress won’t have to act un­til early next year. au­to­matic spend­ing cuts and tax in­creases would cut the deficit for fis­cal year 2013 by more than $500 bil­lion, an amount so sud­den and large that econ­o­mists say it would cause a re­ces­sion. They have called the event the “fis­cal cliff.”

“I don’t want any part of go­ing over the cliff,” Boehner said on Fox.

Gei­th­ner, also on Fox, said that whether the na­tion does so is “a de­ci­sion that lies in the hands of Repub­li­cans who are now op­pos­ing an in­crease in the tax rates.”

The goal of both Obama and Congress is a package of alternative spend­ing cuts and rev­enue in­creases. Repub­li­cans, led by Boehner, have of­fered since the pres­i­dent’s re-elec­tion to ac­cept higher rev­enue, but they have re­fused to sup­port a par­tial ex­ten­sion of the Bush tax cuts that would let the top in­come tax rates rise to 39.6 per­cent from the cur­rent 35 per­cent.

Geit­ner and Boehner met pri­vately Thurs­day, when Gei­th­ner out­lined the pres­i­dent’s po­si­tions for about $4 tril­lion in deficit re­duc­tion over the first 10 years to Boehner and House Ma­jor­ity Leader Eric Can­tor , R-Va.

The specifics were the same as those pro­posed by Obama in his bud­get ear­lier this year, with­out ad­di­tional con­ces­sions. They in­cluded $1.6 tril­lion in new rev­enue from up­per-in­come tax­pay­ers, $600 bil­lion in re­duced spend­ing for Medi­care, Med­i­caid, farm sub­si­dies and other pro­grams, $1 tril­lion in other spend­ing cuts that he and Congress com­mit­ted to last year for the coming decade and $800 bil­lion from pro­jected war spend­ing re­flect­ing the wind­ing down of U.S. com­bat op­er­a­tions overseas.

Boehner, in his Fox ap­pear­ance, dis­missed the ad­min­is­tra­tion’s of­fer as “a non-se­ri­ous pro­posal” for in­clud­ing too lit­tle in spend­ing cuts and too much in ad­di­tional stim­u­lus mea­sures, and for let­ting the top in­cometax rates rise, which Boehner said would hurt some small busi­nesses.

The speaker said Repub­li­cans had pro­posed “a dozen dif­fer­ent ways” to boos tax rev­enue with­out rais­ing rates. But he did not say what those were, and so far the Boehner of­fice has not pro­vided de­tails. Ad­min­is­tra­tion of­fi­cials said Repub­li­cans have made no spe­cific pro­pos­als.

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