Obama: He and Boehner 'pretty close' to a deal

Obama says he, Boehner 'pretty close' on terms of a deal; White House threatens veto on Plan B

Associated Press
Obama: He and Boehner 'pretty close' to a deal
.

View photo

President Barack Obama gestures as he answers a question about the fiscal cliff from reporters, Wednesday, Dec. 19, 2012, at the White House in Washington. (AP Photo/Charles Dharapak)

WASHINGTON (AP) -- Optimistic despite a tightening deadline, President Barack Obama said Wednesday he and House Speaker John Boehner are "pretty close" to a grand fiscal deal to avoid a first-of-the-year shock to the economy, but that congressional Republicans "keep on finding ways to say no as opposed to finding ways to say yes."

Obama cast a resolution to the "fiscal cliff" as a matter of political will. He said in the aftermath of the massacre of school children in Connecticut, the nation deserves a compromise by its political leaders.

"If this past week has done anything, it should just give us some perspective," he said. And he urged lawmakers to "peel off the partisan war paint" and strike a deal.

Obama spoke to reporters at the White House after announcing an administration-wide response to Friday's shooting at an elementary school in Newtown that killed 20 first-graders and six adults.

His comments came shortly after the White House threatened to veto Boehner's backup plan for averting the "fiscal cliff." Boehner's measure, a so-called Plan B, would block tax increases from being triggered Jan. 1 on everyone but those whose incomes exceed $1 million.

Boehner is planning a House vote on his proposal on Thursday, hoping it would raise pressure on Obama to make concessions as both sides continue reaching for a bipartisan deal on averting the "fiscal cliff." Without an agreement among lawmakers, broad tax increases on nearly all taxpayers and budget-wide spending cuts will be triggered in early January.

Boehner, R-Ohio, responded to Obama with a defiant tone. In an appearance before reporters that lasted under a minute, Boehner called on Obama to offer a deficit-cutting plan balanced between spending cuts and tax increases and predicted that the House would pass his backup plan.

"Then the president will have a decision to make," Boehner said. "He can call on the Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history."

Obama dismissed Boehner's proposal, saying it would not provide unemployment insurance for 2 million jobless Americans and would result in higher taxes for families that benefit from various tax credits.

"That violates the core principles that were debated during the course of this election and that the American people determined was the wrong way to go," Obama said. Instead, Obama said, he and Boehner in their own talks had moved significantly toward each other before talks reached a lull on Tuesday.

"What separates us is probably a few hundred billion dollars," Obama said. "The idea that we would put our economy at risk because you can't bridge that gap doesn't make a lot of sense."

A number of leaders of business associations went to the White House on Wednesday to meet with senior administration officials as Obama continued to seek allies to apply pressure on Republicans.

"I actually think they've gotten kind of where they need to be on the revenues," former Republican Michigan Gov. John Engler, now president of the Business Roundtable, said as he arrived at the White House. "The question is, it's gone so long, are we there in time? I don't know."

Among others attending were U.S. Chamber of Commerce President Thomas Donohue and former Republican Minnesota Gov. Tim Pawlenty, now president of the Financial Services Roundtable. They were meeting with White House Chief of Staff Jack Lew, Treasury Secretary Timothy Geithner, Obama senior adviser Valerie Jarrett and his economic adviser, Gene Sperling.

Earlier, Boehner spokesman Brendan Buck said White House opposition to the GOP backup plan "is growing more bizarre and irrational by the day." He said Republicans prefer a deficit-cutting plan that is balanced between tax increases and spending cuts, but Obama has yet to offer such a proposal.

"If Democrats disapprove of this bill, then there is a simple solution: amend it in the Senate and send it back to the House," Buck said in a written statement.

Senior administration officials said there have been no talks advancing the negotiations on a big fiscal cliff deal since Monday, after Boehner called Obama to say he was going to take a Plan B to the House. The officials spoke on condition of anonymity because details of the negotiations had not been publicly announced.

Boehner's prospects for pushing Plan B through the House received a boost Wednesday when anti-tax activist Grover Norquist said the measure would not violate his anti-tax pledge, which most GOP members of Congress have signed.

Norquist said the "sole purpose" of Plan B is to prevent tax increases — not mentioning that it would allow higher taxes on people earning over $1 million, which until recently had been a non-starter among Republicans.

But Club for Growth, a conservative group that often finances challengers to Republicans it considers too moderate, urged lawmakers to oppose Plan B because it would raise taxes on the wealthy, as well as on capital gains and dividends.

Obama's latest offer — focusing tax boosts on incomes above $400,000 — would affect nearly 1.1 million taxpayers. Limiting the tax boosts to income exceeding $1 million would target just 237,000 households, according to the latest Internal Revenue Service figures for 2009.

Allowing a vote on Plan B might increase GOP support for a negotiated compromise with Obama. Some Republicans might feel more comfortable supporting an accord with Obama — which would likely include more tax increases than they want — after being given a chance to vote for Boehner's narrower tax increase on millionaires because it would let them show voters that they preferred a smaller tax boost.

Even if it could survive in the House, Senate Majority Leader Harry Reid, D-Nev., has declared it dead in his chamber and now the White House has promised to veto it should it somehow reach Obama's desk.

The backup plan by Boehner would do nothing to head off deep cuts in defense and domestic programs scheduled to begin taking effect in January. And it contains none of the spending reductions that both Obama and Boehner have proposed in their efforts to strike a compromise.

"The speaker is trying to get as much leverage as he can to deal with the president," said Rep. Charles Boustany, R-La., describing the pressure Republicans were hoping it would put on the White House. But he added that he wasn't sure the plan was the best way to get that leverage.

Besides letting tax rates rise only on incomes exceeding $1 million, Boehner's Plan B also would boost the top rate on capital gains and dividends from their current 15 percent to 20 percent for earnings over $1 million, preventing higher increases. It would continue current tax levels on inherited estates — less than Obama wants — and prevent the alternative minimum tax from raising taxes owed by 28 million middle- and upper-class families.

Boehner unveiled his backup plan on Tuesday. He did so even though he and Obama have come tantalizingly close to finding a politically palatable combination of revenue increases and budget savings that could slice around $2 trillion from projected federal deficits over the coming decade.

Obama has reduced his demands for tax increases to $1.2 trillion over 10 years, to be imposed on incomes exceeding $400,000 annually. In so doing, the president abandoned his campaign season insistence that he would raise taxes on individuals earning over $200,000 and couples making more than $250,000.

Boehner has boosted his revenue offer to $1 trillion, including raising income tax rates on incomes over $1 million. That is a major concession from the leader of a party that has made opposition to higher rates a fundamental tenet for a quarter century.

Obama has also departed from his party's orthodoxy by proposing smaller annual cost-of-living increases for Social Security recipients. The new formula for measuring inflation would affect other benefit programs as well and push more people into higher income tax brackets.

___

Associated Press writers Andrew Taylor and Stephen Ohlemacher contributed to this report.

Rates

View Comments (119)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Enjoy this refreshing Triple Play offer!

    Get FIOS TV Mundo starting at $79.99/mo. w/ no annual contract + 2-yr. price guarantee. Or sign for 2 yrs. & get a $300 prepaid Visa. Click here.

    AdChoicesVerizon FiOS ®Sponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Verizon Has You Covered

    For the most coverage in cities coast to coast, the choice is simple. Verizon is America's largest most reliable 4G LTE network.

    AdChoicesVerizonSponsored
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • 1 Tip To Lose Belly Fat

    It's Hollywood's Hottest Diet And Gets Rid Of Stubborn Fat Areas Like Nothing Else.

    AdChoicesagoodcooksSponsored
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • 10 rock-solid stocks for conservative investors

    10 rock-solid stocks for conservative investors Shares with low volatility can beat their indexes with less risk Bloomberg News/Landov U.S. Bancorp is the cheapest S&P 500 stock

    MarketWatch
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…

    Credit.com