Congressional Republicans on Thursday flatly dismissed a deal proposed by United States Treasury Secretary Timothy Geithner that he said would avert the so-called fiscal cliff by raising $1.6 trillion in tax revenue and reducing spending by $400 billion.
By the time Geithner left Capitol Hill late Thursday, following hours of meetings with lawmakers, Republicans were expressing anger at the Democrats' solution for stopping hundreds of billions of dollars in tax hikes and $1.2 trillion in automatic spending cuts. One Congressional aide called the administration's offer -- which includes $50 billion in new stimulus spending -- "a joke."
As of Friday, there are four weeks and three days for President Obama and Republicans to find common ground to stop the massive cuts and tax hikes that economists say would damage the economy and drastically elevate the jobless rate.
|President Obama proposed dealing with the fiscal cliff in stages, including:|
|-Immediate increase in tax rates of richest Americans|
|-Immediate increase in taxes on capital gains and dividends|
|-Imposing estate tax at 2009 levels|
|-Extending payroll tax cuts|
|-Unspecified cuts in nonentitlement programs|
|-Extension of unemployment insurance|
|-New stimulus spending starting with $50 billion next year|
|-Permanent increase in nation's borrowing limit|
|-Reform tax code to increase revenue by $1.6 trillion|
|-Cut $400 billion from Medicare|
But the parties are locked in opposing positions, with Democrats insisting on bringing in new revenue via taxes that include a rate increase for those making more than $250,000. Republicans, meanwhile, insist on major federal spending cuts and entitlement reform to rein in costs.
House Speaker John Boehner, R-Ohio, said after meeting Geithner on Thursday that he was disappointed with the Democratic offer and that it did nothing to move the nation away from the fiscal cliff.
"No substantive progress has been made in the talks between the White House and the House over the last two weeks," Boehner said.
Across the Capitol, Democrats said Republicans need to compromise -- by approving the Democratic proposal to extend tax cuts for just the lower income earners while letting the cuts for the top two income brackets expire.
"He has a responsibility," said Senate Majority Leader Harry Reid, D-Nev., referring to Boehner. "The responsibility is to call this measure that will protect 98 percent of Americans for a vote in the House of Representatives."
The fight for a deal will eventually boil down to how much in new taxes Republicans are willing to stomach, coupled with the maximum amount in cuts Democrats will allow.
According to a top Boehner aide, the speaker is not going to bend on refusing an increase in tax rates but is sticking to his offer to bring in money via the closure of some tax loopholes.
The loophole idea is being shopped around the GOP conference, with some members warming to the idea of eliminating the mortgage interest deduction and the charitable contribution deduction.
"If it's done in a means-tested way, that may make it a little more palatable," Rep. Phil Gingrey, R-Ga., told The Washington Examiner.
Republicans argue that Democrats have made few offers to cut spending and are instead insisting on tax increases with the promise of making cuts later. Democrats say the budget was reduced enough during the 2011 debt ceiling standoff.
"We've already voted for over a trillion dollars in cuts," House Minority Leader Nancy Pelosi, D-Calif., said Thursday. "Revenues are needed, and job creation is essential to reducing the deficit."