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President Counters: $400,000 for Couples

House speaker has offered up millionaires in ‘fiscal cliff’ fight

December 18, 2012
By DAVID ESPO AP Special Correspondent , The Intelligencer / Wheeling News-Register

WASHINGTON - President Barack Obama has agreed to curtail future cost-of-living increases for recipients of Social Security and softened his demand for higher taxes at upper income levels as part of accelerating talks with House Speaker John Boehner to avoid a "fiscal cliff," people familiar with the talks said Monday.

Speaking a few hours after Obama and Boehner met at the White House, these people said the president was now seeking higher tax rates beginning at incomes over $400,000 for couples, down from the $250,000 level that was a cornerstone of his campaign for re-election.

Obama's willingness to reduce future cost-of-living increases in Social Security and numerous other government programs marked a clear a concession to Boehner, although it came with an asterisk. The president wants lower-income recipients to receive protection against any loss from scaling back future cost of living increases, these officials said.

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AP Photo
President Barack Obama has softened his demand for the elimination of tax breaks to avoid the looming “fiscal cliff.”

Nor did Obama's offer include raising the age of Medicare eligibility from 65 to 67, a Republican goal that has drawn particularly strong objections from Democrat liberals.

Several officials also said during the day that Boehner's offer late last week to accept higher tax rates included provisions that would mean higher taxes on investment income and dividends earned by wealthy Americans.

The people who described the talks did so on condition of anonymity, citing the secretive nature of the discussions.

The maneuvering is aimed at reaching an agreement that would include cancellation of a scheduled year-end hike in taxes for nearly all wage-earners as well as spending cuts at the Pentagon and in domestic programs across the government.

Some economists inside and outside the government have warned that the combination of the two, set to begin at year's end, could send the economy into recession.

Other major issues are part of the negotiations. Without action by Congress, for example, long-term unemployment benefits will expire for millions at the end of the year, and doctors will face a cut in the payments they receive for treating Medicare patients.

Obama has also called for assistance for hard-pressed homeowners as well as fresh economic stimulus measures, and some Democrats want to include a sizeable amount of disaster aid in any legislation to offset the cost of Superstorm Sandy.

On another point, Obama's latest offer dropped his earlier proposal to extend a payroll tax cut due to expire at year's end.

At the White House, spokesman Jay Carney sidestepped when asked about curbing cost-of-living increases for benefit programs. The president "is prepared to make tough choices. He also understands that his bill will not, as written, likely be what the final compromise, if there is one, looks like," he said.

"But he insists and will insist before he signed anything that there is the balance that he seeks that is fair and that seniors aren't bearing the burden so that the healthy bear less - those who can afford it most bear less."

A spokesman for Boehner declined comment on the tax proposals.

 
 
 

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