Republicans warned President Barack Obama on Wednesday that he must take the lead on negotiations over the so-called fiscal cliff and present a solution that could pass both the House and Senate.
Speaker of the House John Boehner told his Republican caucus in a closed-door meeting that Obama “has a responsibility to put forward a plan that can pass both chambers of Congress,” an official who attended the meeting said.
The White House and opposition Republicans are struggling to thrash out a deal that avoids a set of crippling tax hikes and across-the-board spending cuts that kick in early next year if the two sides fail to agree on how to reduce America’s skyrocketing debt.
Obama presented an initial offer last week, while Republicans led by Boehner presented their counter-offer. Both have been rejected outright — at least publicly — by the other side.
With just 27 days to go before the US economy could plunge over the fiscal cliff, Boehner told reporters, “now we need a response from the White House.”
“We can’t sit here and negotiate with ourselves,” he said.
Boehner pointed to the Republicans’ proposal to raise $800 billion in new revenues by closing tax loopholes and ending some deductions as a sign they are “ready and eager” to negotiate in good faith.
That’s part of the broader $2.2 trillion Republican package, including $1.2 trillion sliced from federal spending, with half of that coming directly from Medicare, the federal health program for the elderly.
Boehner insisted that the plan Obama has put forward, which includes $1.6 trillion in new taxes and just $600 billion in spending cuts, “couldn’t pass either house of the Congress.”
Kevin McCarthy, the House’s number three Republican, said he saw an opportunity for Obama to show leadership.
“I think the next 72 hours are critical. If he sits back and continues to play politics, that will be your answer to where we’re going,” McCarthy said.
Obama wants to extend tax cuts for 98 percent of Americans but raise rates on the richest two percent. Republicans want to extend all tax cuts for a year, and discuss spending cuts and tax reform to produce more revenues.
The president campaigned for re-election on the basis of raising taxes on the wealthiest, while Republicans, though open to raising more revenue, refuse to do so by raising marginal tax rates.
Boehner rejected the notion that opposing tax rate hikes means Republicans are opposed to drawing more revenues from the wealthiest Americans.
“The revenues we’re putting on the table are going to come from, guess who? The rich,” Boehner said.
“There are ways to limit deductions, close loopholes and have the same people pay more — more of their money to the federal government without raising tax rates, which we believe will harm our economy.”
Outraged Senate Democrats railed against Boehner for refusing to bring a bill to the House floor — already passed by the Senate — that would extend the Bush-era tax cuts for households making under $250,000 per year.
“We are giving the Republicans 98 percent of what they want,” Senator Barbara Boxer said, accusing Boehner of holding middle class families “hostage” in order to give tax breaks to billionaires.
“That’s wrong,” she said. “What are you thinking? What are you doing?”
Some Republicans have broken ranks with the party and said they could agree to raising tax rates for the wealthy.
“Personally, I know we have to raise revenue; I don’t really care which way we do it,” Republican Senator Tom Coburn said Wednesday on MSNBC.
“Actually, I would rather see the rates go up than do it the other way (by capping deductions), because it gives us greater chance to reform the tax code and broaden the base in the future.”
A poll in Tuesday’s Washington Post showed that 53 percent of Americans would blame Republicans if the economy tumbles over the cliff, compared to 27 percent who would blame Obama and Democrats.
House business ends mid-day Wednesday and resumes next week. Asked if allowing members to bolt Washington at such a crucial period reflected poorly on efforts to resolve the impasse, Boehner stressed he was sticking around.
“I’ll be available at any moment to sit down with the president if he gets serious about solving this problem,” he said.