Boehner opens door to tax hikes, shifts fiscal cliff talks

Mon Dec 17, 2012 12:13am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By David Lawder and Mark Felsenthal

WASHINGTON (Reuters) - The first real movement in the "fiscal cliff" talks began on Sunday, with Republican House Speaker John Boehner edging slightly closer to President Barack Obama's key demands as they try to avert the steep tax hikes and spending cuts set to take effect unless Congress intervenes by December 31.

But Boehner's new positions, on tax rates and the total amount of new revenue to be included in a deficit-reduction deal, were still far from those held by Obama.

And the two sides have yet to make headway on tough issues such as entitlements, with the Republicans wanting far more than Democrats are likely to tolerate in cuts to Medicaid and Medicare, the government healthcare programs for the poor and seniors.

Sources familiar with the Obama-Boehner talks confirmed that Boehner proposed extending low tax rates for everyone who has earned less than $1 million, and rates would rise for wages above that. Obama wants that threshold set at $250,000.

Under current law, the 35 percent top tax rate is scheduled to expire on January 1, and would automatically go to 39.6 percent - where it was during the Clinton administration.

Boehner also has increased to $1 trillion his figure for total revenue, compared to Obama's figure of $1.4 trillion. The balance of a 10-year deficit-reduction plan would come from spending cuts.

The White House has not accepted the Boehner proposals.

The Boehner offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end "fiscal cliff."   Continued...

U.S. House Speaker John Boehner (R-OH) listens to a question while speaking with reporters in the Capitol in Washington December 13, 2012. REUTERS/Kevin Lamarque