The Associated Press is reporting that President Barack Obama has made a new budget offer to House Speaker, including a significant shift from a previous sticking point in their negotiations to avert the so-called fiscal cliff.Obama’s latest counteroffer raises the threshold for tax increases up to incomes above $400,000. That’s an increase from previous demands dating all the way back to the presidential campaign, in which Obama had called for taxes on incomes above $250,000 to return to Clinton-era rates.
Reuters reported on Twitter that Obama’s plan includes $1.2 trillion in increased revenue and $1.22 trillion in reduced spending. Boehner’s office, however, pegged the numbers at $1.3 trillion in new revenue and only $930 billion in spending cuts.
The plan would cut more from health care programs, and would add an additional $200 billion in spending cuts over 10 years. It also would include cost of living adjustments for Social Security beneficiaries, which Bloomberg reported earlier Monday.
Boehner’s office called Obama’s offer a “step in the right direction,” but still said some work needed to be done.
“Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced,” Boehner spokesman Michael Steel said in a statement. “We hope to continue discussions with the President so we can reach an agreement that is truly balanced and begins to solve our spending problem.”
Boehner has moved toward the president on the revenue side of the equation over three meetings in the past five days. For the first time on Saturday, Boehner proposed tax-rate increases as part of his plan, though he opened by offering to raise rates on incomes above $1 million. On Sunday, Boehner reportedly offered to lift the debt ceiling for one year.
Now, Obama’s offer appears to bring the two sides even closer on revenue, while Obama proposes some spending cuts and changes to entitlements.
Significantly in his newest plan, Obama dropped his attempt to extend payroll tax cuts, which means there’s likely to be at least some tax increase for a wide swath of Americans.
Obama also did not agree to any increase in the Medicare eligibility age, which has been a consistent sticking point throughout the negotiations.
Obama and Boehner met for approximately 45 minutes at the White House on Monday.