Obama and Boehner seem to hit wall as ‘fiscal cliff’ looms


WASHINGTON — Once-upbeat talks over the nation’s year-end budget crisis stalled Thursday as Republicans rejected the latest White House offer and emboldened Democrats held firm on President Obama’s insistence that wealthier Americans must pay more taxes.

House Speaker John A. Boehner (R-Ohio) struck a gloomy note after speaking by phone with Obama late Wednesday — a conversation described as “curt” by one source — and meeting Thursday morning with Treasury Secretary Timothy F. Geithner in the Capitol.

Geithner presented the White House’s latest offer, similar to its opening bid: $1.6 trillion in new revenues over a decade, largely from tax increases on the wealthy, as well as spending cuts the president had previously proposed.


The White House also wants $50 billion in new stimulus spending, aid to help homeowners refinance mortgages, $30 billion in extended unemployment benefits and a new process to make it easier to raise the federal debt limit debt, which must increase in a matter of months to prevent a default.

“I’m disappointed in where we are,” Boehner said.

Four weeks remain before the nation is due to hurtle off the $500-billion “fiscal cliff” of tax hikes and spending cuts, which experts warn could cause another recession. Tax rates in place for a decade are set to rise on Dec. 31; days later, massive spending cuts would begin to slice the federal government.

Neither political party has budged from its starting position. Top Republicans also have refused Obama’s call to pass a bill that would prevent a tax hike on 98% of households while talks continue.

As Obama prepares to take his proposal on the road Friday, Democrats are increasingly buoyed, believing they hold a stronger hand. “Look, we don’t expect the Republicans to be enthusiastic and start cheerleading about a deal that includes higher rates on the wealthiest Americans,” said New York’s Sen. Charles E. Schumer, the No. 3 Democrat. “But they see the handwriting on the wall.”

With Republicans wary of being blamed for a New Year’s tax hike of $2,200 on average Americans if no deal is struck, Obama has tapped his vast campaign infrastructure to put pressure on the GOP.

On a shopping trip to the grand opening of Washington’s first Costco, Vice President Joe Biden suggested the tax breaks for average Americans were needed to maintain consumer confidence.

“Consumer confidence is growing. The last thing we need to do is dash that,” Biden said in between sampling snacks and shopping for holiday gifts.

Obama and Boehner spoke late Wednesday before high-level talks resumed for the first time since top congressional leaders met at the White House immediately after the election.

“It was frank and direct and a good conversation,” White House spokesman Jay Carney said. The call lasted 28 minutes, one White House official said.

Boehner characterized the president as “direct and straightforward.”

Republicans are increasingly frustrated that Democrats have declined to outline specific cuts to Medicare, Medicaid and other government programs in exchange for Boehner’s willingness to consider new revenue sources.

Boehner laid the blame for the stalemate on Obama and the president’s allies on Capitol Hill. “Listen, this is not a game. Jobs are on the line. The American economy is on the line,” Boehner said. “The White House has to get serious.”

As Republicans accuse the president of campaigning rather than negotiating, they are also trying their hand at rousing popular support for keeping tax breaks for all, including the wealthy.

“ReTweet if you believe we cannot solve this #FiscalCliff by taxing the American people,” tweeted Rep. Kevin McCarthy of Bakersfield, the Republican whip.

Both sides had agreed to a framework that would provide a down payment of new revenues and spending cuts this year, and establish targets for broader tax and spending reforms to be worked out next year. But staff talks have made little progress.

Democrats said their offer was on the table — a down payment of $900 billion in new revenue over a decade by allowing upper-end tax rates to expire, as Obama has proposed, for couples earning more than $250,000, or $200,000 for individuals. The top tax rate would increase to 39.6%. For upper-income earners, dividends would be taxed at the regular rates and capital gains at 20%; both are now taxed at 15%.

“Republicans know where we stand,” said Senate Majority Leader Harry Reid (D-Nev.), expressing confusion about Boehner’s complaint that Democrats had not made an offer. “I don’t understand his brain.”