Actual movement, actual concessions, actual progress may be in the making as President Obama and House Speaker John Boehner seem to be getting closer to a deal less than two weeks before the country goes over the so-called “fiscal cliff.”
The movement was prompted by Obama’s concession that he was willing to raise the income threshold where tax increases would begin to $400,000, up from his starting point of $200,000 for individuals. Earlier, Republicans had indicated they would be willing to consider raising some taxes for the wealthy.
This was the way it was bound to go down, as we would get weeks of posturing, finger-pointing and chest thumping from the two sides as they tried to win public support over to their position while bashing the other guy’s argument. While the president took his show on the road, giving speeches and having meetings with the middle-class to make his case that the rich needed to pay more, Boehner kept going before the microphones to bash the president for not being “serious” about a deal, meaning he refused to give in to Republican demands for deep spending cuts in entitlement programs like Social Security and Medicare.
The current level of revenue increase in the latest Obama offer stands at $1.2 trillion over 10 years, down from his initial offer of $1.6 trillion and significantly closer to Boehner’s offer of $1 trillion. As for the tax cuts, the White House would permanently extend the Bush tax cuts on incomes below $400,000, meaning that only the top tax bracket, 35 percent, would increase to 39.6 percent. The current cutoff between the top rate and the next highest rate, 33 percent, is $388,350.
As for spending, the two sides are also getting closer. The White House sits at $1.22 trillion in spending cuts over 10 years, which is actually more cuts than the Republican initial offer of $1.2 trillion. But it is where the cuts occur that will be the biggest sticking point. The White House plan says $800 billion of the cuts would come from programs and $122 billion would come from using a new way to measure inflation that slows the growth of government benefits, particularly Social Security. The White House plan also includes $290 billion in savings from lower interest costs on a reduced national debt.
As for the $800 billion in program cuts, half would come from federal health care programs, $200 billion from other mandatory programs like farm price supports, $100 billion from military spending, and $100 billion from domestic programs under Congress’s annual discretion.