December 18, 2012 — In negotiations on a deal to avert the "fiscal cliff," President Obama on Monday made a new offer that would raise $1.2 trillion in new tax revenue and reduce federal spending on health care programs by $400 billion, the Los Angeles Times reports (Parsons/Mascaro, Los Angeles Times, 12/18). Both sides are under pressure to reach a deal by January to prevent more than a half-trillion dollars in automatic spending cuts and tax increases (Weisman, New York Times, 12/17).
Obama's new proposal is moving closer to a plan that House Speaker John Boehner (R-Ohio) unveiled on Friday, which would raise tax revenue and reduce spending on federal health care and retirement programs by about the same amount (Montgomery/Kane, Washington Post, 12/17).
Obama's latest offer -- which he proposed during a 45-minute in-person meeting with Boehner -- proposes a total of $1.22 trillion in spending cuts, including $400 billion from federal health programs.
The president's proposal also would avert a reduction to Medicare physician reimbursement rates. The offer also reduces his previous tax revenue target from $1.4 trillion and calls for increasing tax rates for individuals with annual incomes over $400,000 (New York Times, 12/17). The president had previously called for tax increases on individuals making over $250,000. The plan does not include a Republican-supported proposal to raise the Medicare eligibility age from 65 to 67.
Senior Republican aides said the president's new offer is "a step in the right direction" but added that it asks for too much new revenue and not enough spending cuts.
Two Sides Possibly Closer; Entitlements Unresolved
Obama's proposal caps several days of negotiations in which the two sides are coming ever closer, especially on tax issues. Meanwhile, neither side has had a major uprising, indicating that lawmakers from both parties are willing to back their respective leader.
Rep. Tom Rooney (R-Fla.) said he and other GOP lawmakers are willing to agree to Boehner's concession on taxes, as long as Democrats commit to seriously reforming entitlements.
Meanwhile, senior Obama administration officials have been reaching out to liberal lawmakers and Obama has been checking in with Democratic congressional leaders to address their concerns over entitlement cuts. (Lee et al., Wall Street Journal, 12/17).
However, senior Republican aides have indicated that there still are gaps between the two sides. Some GOP lawmakers disagree with the Obama administration's calculations, insisting that his plan would increase revenue by $1.3 trillion while his proposed cuts would add up to only $930 billion (New York Times, 12/17).