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White House, GOP trade new offers on federal budget

Published: Wednesday, Dec. 12, 2012 8:39 a.m. CST

(MCT) WASHINGTON — House Speaker John Boehner on Tuesday rejected a new White House offer aimed at averting the tax increases and automatic spending cuts that are due to take effect in three weeks and countered with a plan of his own, an indication that the two sides are starting to negotiate.

President Barack Obama and Boehner, an Ohio Republican, spoke by phone late Tuesday, the second time they’d spoken in three days, after a face-to-face session Sunday at the White House. Neither side released details of Tuesday’s conversation or the new offers.

One congressional source, speaking only on the condition of anonymity to talk even a little about the secret offers, said the White House had made a new offer Monday seeking $1.4 trillion in new tax revenue over 10 years, a slightly smaller request than its earlier insistence that any package raise $1.6 trillion in new revenue over 10 years.

Apparently, the president didn’t come down far enough, however, nor did he provide the kinds of detailed spending cuts Boehner is seeking.

Republicans have offered to raise $800 billion in new revenue.

After receiving the offer, Boehner sent back his own. “We sent the White House a counteroffer that would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs,” said Michael Steel, Boehner’s spokesman.

The White House declined to comment on either offer, both of which came after Obama and Boehner met Sunday for their first one-on-one meeting since the election last month.

White House press secretary Jay Carney said Tuesday that discussions had been cordial, a word Boehner also used. Carney added that “the lines of communication remain open” but he said he wouldn’t provide updates as the negotiations continued.

Steel noted that Boehner had spoken before the House of Representatives earlier Tuesday and demanded that Obama provide specific spending reductions. His office wasn’t satisfied with the new plan.

“As the speaker said today, we’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the ‘balanced approach’ he promised the American people,” Steel said. “The longer the White House slow-walks this process, the closer our economy gets to the ‘fiscal cliff.’”

Carney said the president had offered a detailed proposal of spending cuts in 2011 and again this year.

“Now, it is entirely our expectation that Republicans may not agree with all of our spending cuts; Republicans may want to propose additional spending cuts,” he said. “What we haven’t seen from Republicans, to this day, is a single specific proposal on revenue, and in fact we’ve seen less specificity from Republicans on spending cuts than the president himself has proposed.”

Republicans have accused Obama of playing a waiting game, hoping that enough Republicans will get nervous about the fiscal cliff that they’ll agree to higher taxes without slicing into entitlement programs such as Medicare and Medicaid.

Several top Republicans have said they could back higher income-tax rates on the wealthy, and Boehner hinted last week that he wouldn’t rule out pushing the top income tax rates, now 33 and 35 percent, to 36 and 39.6 percent.

Boehner has been publicly aggressive in his criticism of Obama, telling the House on Tuesday that it was time for the president to get serious about negotiations.

Failure to reach a deal would mean that $500 billion in tax increases take effect early next year, coupled with $109 billion in spending reductions, the first installment toward $1.2 trillion in cuts over two years. The nonpartisan Congressional Budget Office has said that might raise the unemployment rate to 9 percent or higher and push the country into another recession.

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©2012 McClatchy Washington Bureau

Visit the McClatchy Washington Bureau at www.mcclatchydc.com

Distributed by MCT Information Services

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