Republicans reject fiscal cliff proposal

2012-11-30 10:45
US House Speaker John Boehner. (File, AFP)

US House Speaker John Boehner. (File, AFP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Washington - Republicans rejected as "ridiculous" on Thursday a White House plan to raise $1.6 trillion in new taxes over the next decade, as crunch talks on the US deficit took a turn for the worse.

A congressional Republican aide familiar with the White House proposal - presented by Treasury Secretary Timothy Geithner in talks with House Speaker John Boehner - said the offer was a rehash of President Barack Obama's budget request.

"The White House keeps saying it wants a 'balanced approach' but this offer is completely unbalanced and unrealistic," the aide said, as talks stalled on how to avert looming tax hikes and automatic federal spending cuts.

"It calls for $1.6 trillion in tax hikes - all of that upfront - in exchange for only $400bn in spending cuts that come later," he added.

Boehner himself made no comment on the specifics, but told reporters he was "disappointed" with the offer.

"Going over the fiscal cliff is serious business," said Boehner.

Double whammy

"I'm here seriously trying to resolve it. And I would hope the White House would get serious as well," he said, adding that "no substantive progress has been made" since negotiations began more than two weeks ago.

The $1.6 trillion is nearly double what would be raised if tax breaks for the wealthiest 2% of Americans were to expire, which means the White House is seeking hundreds of billions of dollars in additional revenues over the next 10 years.

It is also double the amount the White House hoped to raise in tax revenue through a "grand bargain" that fell through in July of 2011, when Democrats and Republicans clashed over raising the US debt ceiling.

The White House and the Republicans must reach an agreement by the end of the year that lowers the ballooning US deficit by $1.2 trillion over 10 years, as mandated in a poison pill deal agreed last year.

If they don't, tax cuts in place since the presidency of George W Bush will expire and $500bn in across-the-board spending cuts would kick in - a double whammy that could knock the US economy back into recession.

The White House estimates most American households would be hit with $2 200 in additional taxes.

Social Security reform

"While $1.6 trillion is the White House's public position, it is ridiculous to offer that amount two weeks after negotiations began - and less than a month before we must have a solution," the Republican aide said.

There is broad agreement that Bush-era tax cuts should remain for everyone making less than $250 000 per year, but while Obama's Democrats want the cuts to expire for the wealthiest 2%, Republicans are opposed.

Republicans have also demanded action on reform of entitlement programmes such as Social Security, the national pension program for the elderly.

The White House proposal also features new stimulus spending and a permanent end to congressional control over federal borrowing limits - the issue at the heart of last year's spending fight.

Boehner complained of a lack of progress, but Senate Majority Leader Harry Reid, who met separately with Geithner, shot back that Democrats have seen no "serious offer" from Republicans, who are divided over whether to agree quickly on keeping rates low for middle-income families.

Democrats pushed through legislation in the Senate that would let the top tax rate rise from 35% to 39.6% while keeping middle-class rates unchanged, and have urged the Republican-controlled House to pass the bill.

Essential fact

Boehner has refused to bring it to the floor, despite some calls for the bill from within his party.

Congressman Tom Cole made waves when he broke ranks recently to urge fellow Republicans to extend the middle-class tax cuts now, and thrash out a deal on top earners next year.

Both sides have spoken of their desire for a long-term agreement that would tackle the chronic national deficits and debt, but they were still far apart on Thursday.

Senate Minority Leader Mitch McConnell said the White House "took a step backward, moving away from consensus and significantly closer to the cliff".

White House spokesperson Jay Carney insisted there had been some progress on the idea of revenues, but income tax rates remained a problem.

Republicans had yet to "accept the essential fact" that rates will "have to go up", Carney said.

Read more on:    barack obama  |  us
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
6 comments
Add your comment
Comment 0 characters remaining

Inside News24

 
/News

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Kalahari.com - shop online today

Save up to 40% on outdoor accessories!

Tents, sleeping, day packs and more. While stocks last. Shop now!

Month End Madness Sale!

Save up to 60% on across a wide range of goods from books to electronics, DVDs and many more. Sale end 31 January 2015. Shop now!

Valentine’s Day gifts – 14 Feb!

Gifts to spoil him and her. While stocks last. Shop now!

30% off fragrances

Get 30% off fragrances for him and her. While stocks last. Shop now!

Up to 30% off All Textbooks

Save up to 30% off an extensive range of prescribed textbooks for all major universities and FET colleges. Shop Now!

OLX Free Classifieds [change area]

Horoscopes
Aquarius
Aquarius

Something may come back into focus. You may get a second chance to say what needs to be said. The important focus today is to not...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.