WASHINGTON (AP) — Talk of compromise on a broad budget deal greeted returning lawmakers Monday, but agreement still seemed distant as the White House and congressional Republicans ceded little ground on a key sticking point: whether to raise revenue through higher tax rates or by limiting tax breaks and deductions.
House Speaker John Boehner, R-Ohio, pressed his case for revenue derived by reducing tax loopholes rather than raising tax rates on wealthy taxpayers, as President Barack Obama insists.
Boehner, voicing the Republican stance, said: “The American people support an approach that involves both major spending cuts and additional revenue via tax reform with lower tax rates.”
At the White House, Obama spokesman Jay Carney reiterated the president’s pledge not to sign legislation that extends current tax rates to the top 2 percent of income earners — households with incomes over $250,000. “That is a firm position,” Carney said.
Congress and Obama have until the end of the year to avoid across-the-board tax increases that would do away with rates set during the administration of President George W. Bush and restore higher tax rates in place during President Bill Clinton’s administration when the economy was robust and the federal government had a budget surplus.
White House and congressional leadership aides said Obama spoke separately with House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid over the weekend. The aides would not reveal details of the conversations. Obama last met with the bipartisan congressional leadership to discuss the fiscal cliff on Nov. 16. No new meetings have been announced.
Boehner and other GOP leaders planned to meet Wednesday with members of a bipartisan coalition of former members of Congress and business leaders that has advocated cuts in spending in major health care programs as well as changes in the tax code to raise more money but also to lower rates.
Obama met with some members of that same coalition earlier this month. Top officials from the U.S. Chamber of Commerce and from the Business Roundtable met with senior White House aides on Monday.
In addition to looming tax hikes, the new year could also result in steep spending cuts in defense and domestic programs. Lawmakers and the White House fear that such a combined “fiscal cliff” would undercut the military and set back an economic recovery. Republicans say that while they are open to revenue increases, Obama also has to agree to reductions in entitlement spending, particularly in massive health care programs such as Medicare and Medicaid.