White House 'cliff' offer gets GOP cold shoulder

Published on NewsOK Modified: November 29, 2012 at 6:04 pm •  Published: November 29, 2012
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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.

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Associated Press writers Jim Kuhnhenn, Julie Pace, Alan Fram, Stephen Ohlemacher and Andrew Taylor contributed to this story.