Officials say GOP offered no specifics
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.