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April 21, 2015

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Boehner, White House wrestle at edge of fiscal cliff


J. Scott Applewhite / AP

Senate Majority Leader Harry Reid of Nev., center, flanked by Sen. Charles Schumer, D-N.Y., left, and Sen. Patty Murray, D-Wash., gestures during a news conference on Capitol Hill in Washington, Thursday, Nov. 29, 2012.

WASHINGTON — House Speaker John Boehner met with Treasury Secretary Tim Geithner on Thursday and accused Democrats afterward of failing to outline specific cuts to avert the "fiscal cliff" that threatens to send the economy into recession.

The White House and other Democrats said the Republicans were the ones holding things up.

"No substantive progress has been made between the White House and the House" in the past two weeks, Boehner, R-Ohio, told reporters after the private meeting with Geithner at the Capitol.

"I was hopeful we'd see a specific plan for cutting spending, and we sought to find out today what the president really is willing to do," Boehner said.

Top Senate Republican Mitch McConnell of Kentucky also offered a pessimistic take following his separate meeting with Geithner.

"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," McConnell said in a statement. "And today, they took a step backward, moving away from consensus and significantly closer to the cliff."

At the White House, Obama spokesman Jay Carney took a confrontational tone at his daily briefing, saying Republicans must accept the reality that tax rates for the top 2 percent of income earners are going to go up, as President Barack Obama has demanded.

"This should not be news to anyone on Capitol Hill," Carney said. "It is certainly not news to anyone in America who was not in a coma during the campaign season."

"There can be no deal without rates on top earners going up," he declared.

To Boehner's criticism that Obama has not detailed a cost-cutting plan, Carney held up a copy of the president's plan from September 2011, noting that it was available online and on Capitol Hill. He said, "I believe they have electricity and Internet connections."

Senate Democrats insisted that it's up to Republicans to offer a specific roster of spending cuts.

"Republicans know where we stand," said Senate Majority Leader Harry Reid of Nevada. "We're still waiting for a serious offer from Republicans."

Reid said there is strong public support for Obama's proposal to extend all expiring tax cuts except for those that apply to incomes over $200,000 for individuals and $250,000 for couples — legislation that Boehner and other Republicans say would harm the economy rather than help it.

The private meetings and public statements marked an acceleration in the pace of bargaining, if not in movement toward an agreement on an issue that leaders of both parties say they want to resolve.

The speaker has said that Republicans are willing to endorse higher tax revenues as part of a deal to prevent across-the-board tax increases and spending cuts scheduled to take effect at year's end, but only if the agreement includes savings taken from Medicare and other government benefit programs.

Boehner spoke by phone with Obama Wednesday night, and said his remarks Thursday were the result of that conversation, as well as the session with Geithner.

Carney said Obama's telephone call with Boehner lasted 28 minutes. He characterized it "frank and direct" and a good conversation.

Obama is insisting that tax rates go up on family income exceeding $250,000; Boehner is adamant that any new tax revenues come from overhauling the tax code, clearing out tax breaks and lowering rates for all.

The White House has been dismissive of Republicans suggestions that they can raise enough tax revenue by limiting deductions, saying that alone would not generate the amount of money Obama wants in revenue.

A White House document being shared with congressional officials and Obama allies says that placing a $25,000 limit on deductions would generate about $650 billion over 10 years if phased in gradually, and only $450 billion if charitable deductions were excluded from the limit, as some have suggested. Obama is aiming for $1 trillion in budget savings by letting estate taxes and the rates for the top 2 percent of earners rise to Clinton-era levels.

The document, obtained by The Associated Press, states that achieving revenue gains by limiting deductions rather than by letting rates rise for the wealthy "would inevitably force any tax reform designed to further reduce the deficit to raise taxes on middle class families simply to preserve lower rates for the most fortunate."

Republicans are also demanding significant cuts to entitlement programs like Medicare, such as an increase in the eligibility age for the program from 65 to perhaps 67.

As for the "fiscal cliff," across-the-board cuts to the Pentagon and domestic programs set to strike the economy in January along with the expiration of Bush-era tax cuts on income, investments, married couples and families with children. That combination of tax increases and spending cuts would wring more than half a trillion dollars from the economy in the first nine months of next year, according to the Congressional Budget Office.

No one anticipates a stalemate lasting that long, but many experts worry that even allowing the spending cuts and tax increases for a relatively brief period could rattle financial markets.

From their public statements, Obama and Boehner appear at an impasse over raising the two top tax rates from 33 percent and 35 percent to 36 percent and 39.6 percent. Democrats seem confident that Boehner ultimately will have to crumble, but Obama has a lot at stake as well, including a clear agenda for priorities like an overhaul of the nation's immigration laws.

Associated Press writers Jim Kuhnhenn and Julie Pace contributed to this report.

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  1. What a waste of newsprint! Pay no attention to the ramblings of John Boehner or, as he's better known inside the Beltway, the Man Behind the Curtain. Negotiating with him is fruitless as he is Speaker of the House in name only. The fact of the matter is that he has no control over his Republican Caucus and cannot deliver the votes in favor of any issue much less something as monumental as the fiscal cliff. Will Rogers famously said: "I'm not a member of an organized political party. I'm a Democrat.". Jump ahead almost a century and now it is the Republican Party that is rudderless and leaderless. Ask yourself, "Who speaks for the Republican Party?". Who has credibility and authority? Many Americans have a nasty habit of hedging their bets so a post-election Pew Poll comes as no surprise in that now two-thirds of the populace sides with the President and the Democratic Party on the pressing issues of the day. Failure to resolve the fiscal cliff under the President's terms could find many Republican Congressmen out in the cold come the the next mid-term election. Obama has little to lose and everything to gain by being a hard liner but that's not his style. He's given Boehner every opportunity to save face and retain his "leadership" role. But, time is running out and the American people have little patience for leaders who fail to lead. Republican's can either give the American people an early Christmas present or pay the ultimate price in two years. Personally, I'd prefer them to attempt to kick the can down the road one last time and cast themselves as hopelessly irrellevant.