Cliff talks hit a lull with Boehner's 'Plan B'

Published on NewsOK Modified: December 18, 2012 at 6:56 pm •  Published: December 18, 2012
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"Plan B is yet another example of House Republicans walking away from negotiations," said Rep. Chris Van Hollen, D-Md., top Democrat on the Budget Committee.

At the White House, officials remained cautiously optimistic that the talks could get back on track despite Boehner's maneuvering.

Boehner, however, said Obama is the one proving to be too inflexible, even as he held out hope that talks with Obama might yet bear fruit.

"He talked about a 'balanced' approach on the campaign trail," Boehner said. "What the White House offered yesterday — $1.3 trillion in revenue for only $850 billion in spending cuts — cannot be considered balanced."

Boehner also displayed new flexibility on the politically explosive issue of raising the Medicare retirement age from 65 to 67. Boehner said the idea — anathema to Democrats — didn't need to be dealt with this year but could be kicked over into a broader negotiation next year.

"That issue has been on the table, off the table, back on the table," Boehner said. "I don't believe it's an issue that has to be dealt with between now and the end of the year."

Just Monday, the Capitol bristled with optimism that Boehner and Obama might strike a bargain.

In a new offer, Obama dropped his long-held insistence that taxes rise on individuals earning more than $200,000 and families making more than $250,000. He is now offering a new threshold of $400,000 and lowering his 10-year tax revenue goals from the $1.6 trillion he originally sought.

The new Obama plan seeks $1.2 trillion in revenue over 10 years and $1.2 trillion in 10-year spending reductions. Boehner aides say the revenue is closer to $1.3 trillion if revenue triggered by a new inflation index is counted, and they say the spending reductions are closer to $930 billion if one discounts about $290 billion in lower estimated debt interest.

The two sides also differ on the estate tax, extending unemployment benefits and how to address the need to raise the government's borrowing cap to prevent a first-ever U.S. default and a re-run of last year's debt crisis.

The White House was facing its own backlash, with labor, liberal and elderly advocacy groups mounting an organized campaign against any adjustments in cost-of-living for Social Security beneficiaries.

"President Obama and other Democrats campaigned saying Social Security doesn't affect the deficit," said Roger Hickey, co-director of the liberal Campaign for America's Future. "Social Security recipients are going to notice and they are either going to blame John Boehner or President Obama."

The change would reduce annual cost-of-living increases for beneficiaries of Social Security and other government programs. It also would push more people into higher tax brackets by making smaller annual adjustments to brackets.

The administration appeared confident that most Democrats would reluctantly vote for the idea in an attractive enough budget package, particularly one that has the backing of Obama.

"I think many of us still have faith that the president will ultimately, if he strikes a deal with the Republicans, give us a plan that we can vote on that provides that fairness and balance," said Rep. Xavier Becerra, D-Calif.

White House spokesman Carney described the inclusion of the inflation adjustment as "a technical change" that was "not directed at one particular program." He also said that if instituted, the administration would ensure that the most vulnerable beneficiaries would not be affected.

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Associated Press writers Alan Fram, Jim Kuhnhenn and Donna Cassata contributed to this report.