Speaker of the House John Boehner holds his weekly news briefing in the Capitol Visitors Center at the U.S. Capitol Thursday in Washington.(Photo: Chip Somodevilla, Getty Images)
WASHINGTON -- After weeks of stalemate, signs of potential progress
have emerged in talks to avoid the year-end "fiscal cliff" of tax
increases and $1.2 trillion in federal spending cuts over the next 10
In talks with President Obama, Republican House Speaker
John Boehner offered to back raising the income tax rates for people
making $1 million or more if Obama agreed to significant cuts in
entitlement program spending, according to two sources close to the
negotiations. They spoke on condition of anonymity because they were not
authorized to speak publicly.
Obama rejected that offer, the
sources said, but it was the first sign that Boehner was willing to
endorse raising tax rates for anyone. Boehner has rejected previous
requests for higher tax rates, saying instead he favored eliminating tax
loopholes to broaden the tax base and raise about $800 billion over 10
The president has called for higher tax rates for those making $200,000 as individuals or couples making $250,000 or more.
and Boehner last met Thursday evening for about 50 minutes. At the
time, neither the White House nor Boehner disclosed details of that
discussion. Obama called the talks a work in progress.
part of a broader budget deal, Boehner is still seeking more spending
cuts than Obama has proposed, particularly in mandatory health care
spending. Boehner has asked for a long-term increase in eligibility age
for Medicare and for lower costs-of-living adjustments for Social
Boehner's tax proposal was first reported Saturday by Politico.
A Boehner aide would not comment on the report.
and Boehner, the chief negotiators, have significant differences to
cover to reach an agreement. Obama is seeking $1.4 trillion in revenue
in his latest offer, which includes raising the individual tax rates on
the top 2%.
If the two sides can't agree, the tax cuts passed in
2001 and 2003 and signed by President George W. Bush will expire on Dec.
31. That will raise taxes for all Americans. Obama wants to let the top
two marginal rates increase from 33% to 35% and from 36% to 39.6% for
those taxpayers making over that threshold.
with the higher taxes, $1.2 trillion in spending cuts over 10 years
would kick in on Jan. 2. Half of those cuts would come from the defense
budget, which many Republicans and Defense Secretary Leon Panetta have
Boehner has been non-committal about whether or not he
would bring a bill to the House floor to extend the current tax rates
for 98% of Americans, which the Democratic Senate has already passed. It
is one option to address the fiscal cliffif a broader deal cannot be
reached. He said only that a full expiration of the tax rates "remains a
He also reiterated that Republicans will not support an
effort by the president to remove the need for congressional approval to
raise the debt ceiling, the nation's borrowing authority, which is
scheduled to hit its $16.4 trillion limit in mid-February.
speaker and House Republicans have come under increasing pressure form a
number of Senate Republicans who say they should yield to Obama's
demand on tax rates and then press him for additional cuts early next
year in exchange for an increase in the nation's borrowing limit.
has proposed about $600 billion in spending reductions over 10 years,
including about $350 billion in Medicare and other health care savings.
But he has also proposed about $200 billion in additional spending,
including aid to the unemployed and to struggling homeowners and for
public works projects.