Daily Tax Update - December 10, 2012: President Obama and House Speaker Boehner Hold Sunday Meeting To Discuss "Fiscal Cliff"

PRESIDENT OBAMA AND HOUSE SPEAKER BOEHNER HOLD SUNDAY MEETING TO DISCUSS “FISCAL CLIFF”:  House Speaker John Boehner met with President Obama yesterday to discuss the "fiscal cliff."  A joint statement issued after the meeting read:  "This afternoon, the President and Speaker Boehner met at the White House to discuss efforts to resolve the fiscal cliff.  We're not reading out details of the conversation, but the lines of communication remain open."

  • An aide to Boehner said today that Republicans are awaiting a counter-offer from President Obama.  Boehner spokesman Michael Steel said, "The Republican offer made last week remains the Republican offer."  Steel added that Boehner continues to "wait for the president to identify the spending cuts he's willing to make" in deficit-reduction negotiations.
  • There have been reports that the framework of an agreement is likely to contain new tax revenue (generated in part by raising rates on the wealthy and in part by limiting the deductions on the wealthy) and savings sufficient to match a debt-limit increase and postpone roughly $100 billion in across-the-board agency cuts set to hit in 2013.  Senate Finance Chairman Max Baucus said that he and House Ways and Means Chairman Dave Camp are working on a legislative structure.  Baucus said, "We’re trying to get ahead of the curve here . . . to answer a lot of these technical questions about frameworks, guidelines — for both tax and entitlements."
  • Today, White House Press Secretary Jay Carney said, "I won’t characterize yesterday’s meeting or other conversations, but the President does believe that we can reach an agreement.  He has put forward a very detailed plan.  He has shown how he believes we need to achieve the necessary revenue targets in order to put together a large deal that would reflect the goal of $4 trillion in deficit reduction that is so meaningful in terms of our long-term fiscal sustainability.  And he’s made clear in his detailed proposal that he’s willing to enact cuts in our mandatory entitlement programs, including our health care programs. What we haven’t seen yet is any specificity at all from Republicans on revenue; we’ve seen a sentence on revenue.  And while there have been encouraging statements by individual lawmakers about the realization that rates will go up on the top 2%, we haven’t seen anything specific from Republicans with regard to that."  Carney added, "I can only say that the President believes that a deal is possible.  It requires acceptance and acknowledgement in a concrete way by Republicans that the top 2% will see an increase in their rates.  To do that, all that Republicans in the House have to do is vote for a tax cut. All we’re talking about here is the expiration of the Bush-era tax cuts for the top 2%, not a vote to -- a proactive vote to hike taxes on anyone.  What we are asking is that Republicans in the House follow the Senate’s lead and approve tax cuts for the middle class, for 98 percent of the American people -- something they say they believe is the right thing to do, the President believes is the right thing to do, the American public overwhelmingly believes it’s the right thing to do.  Economists believe that tax cuts for the middle class are the most beneficial to the economy."
  • In an interview yesterday, former Republican Senator Alan Simpson and former White House Chief of Staff Erskine Bowles, co-chairs of the Simpson-Bowles deficit reduction commission (The National Commission on Fiscal Responsibility and Reform) spoke about the fiscal cliff.  Simpson said, "There is something terribly bizarre and juvenile about that to think your party comes ahead of your country."  Bowles said that he hoped an agreement could be reached to avoid going over the fiscal cliff stating, "I think it would be disastrous for the country.  You can look at the forecast that we have; economic growth would slow by 4%.  That, by definition, puts you back into recession when you're only growing by 2%.  About 2 million people would lose their jobs.  Unemployment would go to 9%.”

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