News Column

Boehner: No Progress on 'Fiscal Cliff'

November 30, 2012

U.S. House Speaker John Boehner Thursday said there has been no progress in negotiations on averting the so-called fiscal cliff and blamed President Obama.

The comment came just one day after the White House said the administration won't require tax rates on upper-income Americans to rise to Clinton-era levels in a deficit deal.

"No substantive progress has been made in the talks between the White House and the House during the past two weeks," Boehner, R-Ohio, told a news conference.

"I'm disappointed in where we are and in the last couple of weeks."

On Jan. 1, George W. Bush-era tax cuts expire and draconian mandatory budget cuts kick in, a combination economists warn will send the U.S. economy back into recession.

Senate Minority Mitch McConnell, R-Ky., was even more negative following a meeting with Treasury Secretary Timothy Geithner and White House lobbyist Rob Nabors, saying the administration "took a step backward, moving away from consensus."

Obama has said spending cuts must be coupled with increased revenue and the easiest way to raise revenues is to allow marginal income tax rates to rise on the top 2 percent of taxpayers. Republicans are resisting tax increases on incomes of more than $250,000 a year.

Boehner said Obama needs to outline concessions to jump-start the talks.

Treasury Secretary Timothy Geithner, the White House's lead negotiator in the budget talks, was to travel to Capitol Hill Thursday to meet with Boehner.

"The president is willing to look at anything that's sensible and realistic and that is mathematically sound," White House spokesman Jay Carney told reporters Wednesday after being asked if the top rates needed to go to 39.6 percent from 35 percent as Obama has maintained was needed to reach his target of an additional $1.6 trillion in revenue over 10 years.

"But our point on rates is that they are the sensible, clean, simple way and proven way to achieve the kind of revenue target that we've talked about, as you've seen in the president's proposal, a proposal which includes loophole closures and deduction caps, as well, but ones that are realistic," Carney said.

Erskine Bowles, a chief of staff in Bill Clinton's presidency and the Democratic co-chairman of Obama's 2010 deficit-reduction panel, first described the White House's flexibility.

He said Obama was willing to consider limiting high-income tax deductions in exchange for not insisting tax rates above $250,000 a year rise. Republican leaders have said they were open to considering an end to some deductions.

Bowles also expressed pessimism a deal could be reached in Washington's current partisan climate, divided Congress and dwindling legislative calendar.

He put the chances of a deal by the end of the year at one in three.

"I believe the probability is that we are going over the cliff," he said, "and I think that will be horrible."

Obama said Wednesday he wants a deal by Christmas.

"I am ready and able and willing and excited to go ahead and get this issue resolved in a bipartisan fashion so that American families, American businesses, have some certainty going into next year," Obama said Wednesday.

"Now is the time for us to work on what we all agree to, which is let's keep middle-class taxes low," he said. "That's what our economy needs. That's what the American people deserve.

"And if we get this part of it right, then a lot of the other issues surrounding deficit reduction in a fair and balanced and responsible way are going to be a whole lot easier," Obama said. "And if we get this wrong, the economy is going to go south."


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Copyright United Press International 2012