White House makes a “fiscal cliff” counter-offer to House Republicans

Barack Obama

Though he has rejected House Speaker John Boehner’s offer, which included higher tax rates on millionaires and raising the debt ceiling, President Barack Obama made a counter-offer yesterday showing some movement in “fiscal cliff” talks:

The Associated Press is reporting that President Barack Obama has made a new budget offer to House Speaker, including a significant shift from a previous sticking point in their negotiations to avert the so-called fiscal cliff.

Obama’s latest counteroffer raises the threshold for tax increases up to incomes above $400,000. That’s an increase from previous demands dating all the way back to the presidential campaign, in which Obama had called for taxes on incomes above $250,000 to return to Clinton-era rates.

Reuters reported on Twitter that Obama’s plan includes $1.2 trillion in increased revenue and $1.22 trillion in reduced spending. Boehner’s office, however, pegged the numbers at $1.3 trillion in new revenue and only $930 billion in spending cuts.

The plan would cut more from health care programs, and would add an additional $200 billion in spending cuts over 10 years. It also would include cost of living adjustments for Social Security beneficiaries, which Bloomberg reported earlier Monday.

The Hill reports that Boehner rejected the deal, though they quote one Republican aide who said, “It’s a small step in the right direction, but there are still substantive issues that are unresolved and need to be resolved before any agreement can be come to.”

Unfortunately, there is no getting around it, at this point. Republicans will very likely go along with a “fiscal cliff” deal that includes higher taxes for higher-income earners, which will include small business. As explained previously, the best Boehner can hope for is to limit the impact of the tax hikes by pushing the income threshold for those affected as close to $1 million as he can.

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