Obama, Boehner trade pro­pos­als to avert fis­cal cliff

Austin American-Statesman - - FRONT PAGE - By Ben Feller and David Espo

Pres­i­dent Barack Obama and House Speak­erJohn Boehner seek an elu­sive com­pro­mise to pre­vent tax in­creases on the mid­dle class. Of­fi­cials said the pres­i­dent had of­fered to re­duce his de­mand for $1.6 tril­lion in higher tax rev­enue over a decade to $1.4 tril­lion.

WAShINGTON — In a test of di­vided government, Pres­i­dent Barack Obama and House Speaker John Boehner sought an elu­sive com­pro­mise Tues­day to pre­vent econ­omy-dam­ag­ing tax in­creases on the mid­dle class at year’s end, con­fer­ring by phone af­ter a se­cre­tive ex­change of pro­pos­als.

De­tails were sparse and ev­i­dence of sig­nif­i­cant progress scarcer still, although of­fi­cials said the pres­i­dent had of­fered to re­duce his ini­tial de­mand for $1.6 tril­lion in higher tax rev­enue over a decade to $1.4 tril­lion.

There was no in­di­ca­tion he was re­lent­ing on his in­sis­tence — strongly op­posed by most Repub­li­cans — that tax rates rise at up­per in­comes.

Boehner sounded unim­pressed in re­marks on the House floor at mid­day.

“The longer the White House slow-walks this process, the closer our econ­omy gets to the fis­cal cliff,” he said, declar­ing that Obama had yet to iden­tify spe­cific cuts to government ben­e­fit pro­grams as part of an agree­ment that also would raise fed­eral tax rev­enue.

The Ohio Repub­li­can made his com­ments well be­fore he and the pres­i­dent talked by phone about at­tempts to avert a “fis­cal cliff,” across­the-board tax in­creases and cuts in de­fense and domestic pro­grams that econ­o­mists say could send the econ­omy into re­ces­sion.

In re­but­tal, the White House swiftly de­tailed numer­ous pro­pos­als Obama has made to cut spend­ing, in­clud­ing rec­om­men­da­tions to cull $340 mil­lion from Medi­care over a decade and an ad­di­tional $250 bil­lion from other government ben­e­fit pro­grams.

The House Demo­cratic leader, Rep. Nancy Pelosi of Cal­i­for­nia, chal­lenged Boehner to al­low a vote on the pres­i­dent’s pro­posal to ex­tend most ex­pir­ing tax cuts while let­ting them lapse at higher in­comes.

Boehner’s of­fice took the step — un­usual in se­cre­tive talks — of an­nounc­ing that Repub­li­cans “sent the White House a coun­terof­fer that would achieve tax and en­ti­tle­ment re­form to solve our loom­ing debt cri­sis and cre­ate more Amer­i­can jobs.”

Both sides say they want a deal to pre­vent dam­age to the econ­omy, but that stated com­mit­ment has been ac­com­pa­nied by a fierce bat­tle to gain the po­lit­i­cal high ground in ne­go­ti­a­tions.

Repub­li­cans ac­knowl­edge that Obama has an ad­van­tage in one re­spect, cit­ing his re-elec­tion af­ter a race in which he made higher taxes on the wealthy a cen­ter­piece of his cam­paign.

At the same time, Repub­li­cans hold pow­er­ful lever­age of their own, the cer­tainty that by spring the pres­i­dent will be forced to ask Congress to raise the government’s bor­row­ing author­ity. It was just such a threat that pre­vi­ously al­lowed them to ex­tract $1 tril­lion in spend­ing cuts from the White House and Demo­cratic law­mak­ers, a sit­u­a­tion that Obama has vowed he won’t let hap­pen again.

J. SCOTT APPLEWHITE / AP

Speaker John Boehner heads for the House floor Tues­day to make re­marks about ne­go­ti­a­tions.

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