WASHINGTON (AP) — The White House is seeking $1.6 trillion in higher taxes over a decade and an immediate infusion of funds
to aid the jobless, help hard-pressed homeowners and perhaps extend the expiring payroll tax cut, officials said Thursday
as talks aimed at averting an economy-rattling "'fiscal cliff" turned testy.
In exchange, the officials said, President
Barack Obama will support an unspecified amount of spending cuts this
year, to
be followed by legislation in 2013 producing savings of as much as
$400 billion from Medicare and other benefit programs over
a decade.
The offer produced a withering response from House Speaker John Boehner, R-Ohio, after a closed-door meeting in the Capitol
with Treasury Secretary Tim Geithner. "Unfortunately, many Democrats continue to rule out sensible spending cuts that must
be part of any significant agreement that will reduce our deficit," he declared.
Boehner added, "No substantive progress has been made between the White House and the House" in the two weeks since Obama
welcomed congressional leaders at the White House.
Democrats swiftly countered that any holdup was the fault of Republicans who refuse to accept Obama's campaign-long call to
raise tax rates on upper incomes.
At the White House, presidential press secretary Jay Carney said, "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."
With barely a month remaining until a
year-end deadline, 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."
Republican aides provided the first description of the White House's offer, although Democratic officials readily confirmed
the outlines.
Under the proposal, the White House is seeking passage by year's end of tax increases totaling $1.6 trillion over a decade,
including the rate hikes sought by Obama.
Obama also asked for 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 White House also wants a new stimulus package to aid the economy, with a price tag for the first year of $50 billion,
as well as an extension of the Social Security payroll tax cut that is due to expire on Dec. 31, or some way to offset it.
In political terms, the White House proposal
is a near mirror image of what officials have said Republicans earlier
laid down
as their first offer — a permanent extension of income tax cuts at
all levels, an increase in the age of Medicare eligibility
and steps to curtail future growth in Social Security
cost-of-living increases.
In exchange, the GOP has offered to support unspecified increases in revenue as part of tax reform legislation to be written
in 2013.
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.
For the first time since the Nov., 6
elections, partisan bickering seems to trump productive bargaining as
the two sides maneuvered
for position.
Senate Majority Leader Harry Reid told
reporters, "We're still waiting for a serious offer from Republicans,"
the Nevada Democrat
said at a news conference.
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.
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.
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.
At the same time, there are tremors within
the GOP ranks, with a small number of Republicans saying they are
willing to let
tax rates rise at upper incomes in view of the election returns,
and others predicting legislation to that effect would pass
the House if put to a vote.