WASHINGTON – House Speaker John Boehner said Wednesday that “serious differences” remain between him and President Barack Obama in negotiations on averting automatic spending cuts and tax increases that economists fear could send the U.S. economy over a “fiscal cliff.”
Boehner's comments came as top Democrats pushed back on GOP demands for tough steps like raising the Medicare eligibility age and curbing the cost-of-living adjustment for Social Security.
Boehner and Obama spoke on the phone Tuesday, a day after the president offered to reduce his initial demand for $1.6 trillion in higher tax revenue over a decade to $1.4 trillion. But Obama continued to insist that much of the revenue come from raising top tax rates on the wealthy.
Boehner countered later Tuesday with another offer that GOP aides said stuck close to a document delivered to the White House a week ago. A top White House aide, Rob Nabors, came to the Capitol to respond. A Democratic official said Boehner's counter-offer included permanent extension of all Bush-era tax rates for all taxpayers including the top 2 percent of earners, the same as his earlier proposal. Boehner offers $800 billion in new revenues through a tax reform measure next year. The officials required anonymity because the talks are not public.
Boehner on Wednesday offered a sour assessment less than three weeks before the cliff would strike the economy with $500 billion worth of spending cuts and higher tax rates if left in place through September.
“There were some offers that were exchanged back and forth yesterday and the president and I had pretty frank conversations about just how far apart we are,” the Ohio Republican said after a closed-door meeting with fellow GOP lawmakers in which he advised them not to make plans for the week after Christmas.
Leading lawmakers expressed pessimism that a deal was close, despite increasing angst about a Dec. 31 deadline to stop the expiration of Bush-era tax cuts and separate across-the-board spending cuts that are the result of Washington's failure to complete a deficit-reduction deal last year.
“I think it's getting worse, not better,” House GOP Whip Kevin McCarthy, R-Calif., said.
The Boehner camp again said it's up to the White House to proffer additional spending cuts to programs like Medicare. The White House countered that Republicans still need to cave on raising tax rates for the rich.
House Minority Leader Nancy Pelosi, meanwhile, warned Republicans against insisting on raising the Medicare eligibility age as part of any deal.
“One of the things that we object to is raising the Medicare age,” Pelosi said on “CBS This Morning.” “Don't go there.”
Pelosi said raising the retirement age wouldn't contribute much savings toward an agreement, adding “Is it just a trophy that the Republicans want to take home?”
Raising the Medicare age from 65 to 67 could cut Medicare costs by $162 billion over a decade, according to a Congressional Budget Office estimate last year. But by 2035, it would cut Medicare's projected budget by 7 percent.
Democrats also pushed back against a GOP plan to reduce Social Security COLAs. That's a step back from talks between Obama and Boehner 18 month ago in which Obama considered the lower COLA.
“Quite frankly, Social Security is off the table,” said Rep. Joe Crowley, D-N.Y.
But in an ABC interview Tuesday, Obama did not reject a Republican call to raise the age of Medicare eligibility from 65 to 67, a proposal many Democrats strongly oppose.
The proposal is “something that's been floated,” Obama said, not mentioning that he had tacitly agreed to it in deficit-reduction talks with Boehner more than a year ago that ended in failure.
“When you look at the evidence, it's not clear that it actually saves a lot of money,” Obama said. “But what I've said is, let's look at every avenue, because what is true is we need to strengthen Social Security, we need to strengthen Medicare for future generations, the current path is not sustainable because we've got an aging population and health care costs are shooting up so quickly.”
The White House, for its part, detailed numerous proposals Obama has made to cut spending, including recommendations to cull $340 billion from Medicare over a decade and an additional $250 billion from other government benefit programs.
Obama remains determined that tax rates rise on family income exceeding $250,000, a move Republicans say would strike many small businesses that are engines of new jobs and file as individuals when paying their taxes.
Two weeks before the year-end holidays, time to find agreement was short, but not prohibitively so.
“I think it's going to be extremely difficult to get it done before Christmas, but it could be done,” Senate Majority Leader Harry Reid, D-Nev., said.
Democrats have watched with satisfaction in recent days as Republicans struggle with Obama's demands to raise taxes, but Reid privately has told his rank and file they could soon be feeling the same distress if discussions grow serious on cuts to benefit programs.
Obama's plan would raise $1.6 trillion in revenue in part by raising tax rates on incomes over $200,000 for individuals and $250,000 for couples. He has recommended $400 billion in spending cuts over a decade.
He also is seeking extension of the Social Security payroll tax cut due to expire Jan. 1, a continuation in long-term unemployment benefits and steps to help hard-pressed homeowners and doctors who treat Medicare patients.
The White House summary noted that Obama last year signed legislation to cut more than $1 trillion from government programs over a decade, and was proposing $600 billion in additional savings from benefit programs.
Boehner's plan, in addition to calling for $800 billion in new revenue, envisions $600 billion in savings over a decade from Medicare, Medicaid and other government health programs, as well as $300 billion from other benefit programs and another $300 billion from other domestic programs.