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| President Barack Obama waves after speaking at the Rodon Group, which manufactures over 95% of the parts for K'NEX Brands toys, Friday, Nov. 30, 2012, in Hatfield, Pa. The visit comes as the White House continues a week of public outreach efforts, while also attempting to negotiate a deal with congressional leaders. |
WASHINGTON (AP) -- One month before the deadline, negotiations between President Barack Obama and Republicans to save the economy from a plunge over the fiscal cliff are still in the throat-clearing stage. Serious bargaining is on hold while the two sides vie for political leverage.
Deal
or no deal, nothing is likely to become clear until far closer to the
year-end deadline, when the lure of getting away for the holidays will
sharpen the focus of negotiators.
"There's a
stalemate. Let's not kid ourselves," House Speaker John Boehner, R-Ohio,
said Friday, punctuating the end of a week of political theater by
divided government. "Right now we're almost nowhere."
He
spoke as Obama all but called Republicans heartless louts from a
Charles Dickens story. Their failure to pass an extension of middle
class tax cuts would amount to a Christmas "lump of coal" for millions,
Obama said in Hatfield, Pa. "That's a Scrooge Christmas," added the
recently-re-elected president, who claims a voters' mandate to extend
existing tax cuts for all but upper incomes.
Boehner,
too, claimed a mandate after voters renewed the House Republican
majority on Nov. 6. But the speaker's political hand was weakened -
witness his postelection announcement that the GOP would put revenues on
the bargaining table. His control seems to have eroded further in the
weeks since, as a smattering of the GOP rank and file let it be known
they could support the president's tax plan under the right
circumstances.
"Rate increase, if the package
includes significant entitlement reform that gets you to $4 to $6
trillion (in deficit savings) over 10 years, I would vote for that," a
retiring Rep. Steve LaTourette, R-Ohio, told reporters on Friday.
Rep.
Charles Bass made similar comments. "If it gets us past the fiscal
cliff and the president is willing to consider meaningful savings in
entitlements, it's a legitimate solution," said the New Hampshire
lawmaker, who was defeated for re-election this fall.
Yet the speaker also made a little-noticed move this week to shore up his bargaining position.
He
issued a statement noting that Senate Democrats are threatening to
weaken the Republicans' ability to block legislation in their chamber in
the new Congress that convenes in January.
"Any
bill that reaches a Republican-led House based on Senate Democrats'
heavy-handed power play would be dead on arrival," he warned.
In
the talks to date, Democrats have declined to identify a single
spending cut they are willing to support, while Republicans avoid
specifics on revenue increases they would swallow.
Once
each side moves beyond opening gambits, Republicans will have to decide
whether they are willing to raise income tax rates on upper incomes, as
Obama wants, or hold fast to closing loopholes as a means of producing
increased tax revenue.
For their part,
Democrats will decide how much savings to pull from benefit programs
like Medicare, Medicaid and possibly Social Security without cutting
guaranteed benefits, a line they vowed not to cross in earlier budget
negotiations.
Obama's opening proposal,
delivered to Boehner and other Republicans by Treasury Secretary Tim
Geithner on Thursday, calls for $1.6 trillion in higher taxes over a
decade, hundreds of billions of dollars in new spending, a possible
extension of the temporary Social Security payroll tax cut and enhancing
the president's power to raise the national debt limit.
The
new federal revenue would include $950 billion generated by raising
taxes on families with incomes over $250,000 and by closing certain tax
loopholes by the end of this year, according to administration officials
who described the offer Friday only on condition of anonymity. The
remainder would be achieved through an overhaul of the tax system next
year and would not become effective until 2014, said the officials, who
were not authorized to provide the details by name.
Obama
is seeking new spending to help the unemployed, homeowners whose
property's value is less than their mortgage, doctors who treat Medicare
patients and wage-earners.
In exchange, the
president would back cuts of an unspecified amount this year, and
savings of as much $400 billion from Medicare and other benefit programs
in 2013.
The White House plan also counts
about $1 trillion in spending cuts agreed to last year, as well as about
$800 billion that the administration claims as savings because of the
drawdown of troops from Iraq and Afghanistan.
Republicans said they were surprised at the plan, and Democrats wondered aloud why.
"Each
side said they'd submit a down payment. We have. Our preference is
revenue. What is theirs?" said Sen. Chuck Schumer, D-N.Y.
Republicans
have an opening offer of their own, in line with their conservative
anti-tax views, much as Obama's is designed to solidify his own
political position. While agreeing to new revenue, GOP lawmakers want to
extend expiring income tax cuts at all levels, including the top
brackets. They also want to raise the age of eligibility for Medicare
and curtail future cost-of-living adjustments for Social Security and
other benefit programs. The same adjustment would raise revenue for the
government by making a change in annual adjustments of tax brackets.
"We're
the only ones with a balanced plan to protect the economy, protect
American jobs and protect the middle class from the fiscal cliff,"
Boehner said on Friday.
That was a jab at
Obama, who campaigned for re-election advocating a balanced approach to
avoiding the fiscal cliff that combines higher taxes on the wealthy with
spending cuts.
Said the president: "In Washington, nothing's easy, so there is going to be some prolonged negotiations."
