BOEHNER NO PROGRESS IN FISCAL CLIFF "CHIN WAGS"

Budget impasse: President Barack Obama, right, and top Republican John Boehner, left, met to discuss the fiscal cliff but there has been little progress towards a deal

Original Post

Speaker John Boehner, R-Ohio, on Thursday rejected a White House plan to avert the so-called fiscal cliff at year’s end that would generate nearly $1.6 trillion in new tax revenue over the next decade and require Republicans to allow Congress to relinquish its control over the nation’s statutory borrowing limits. 

“A complete break from reality,” is how the plan, delivered to Boehner and other congressional leaders by Treasury Secretary Timothy Geithner at their Capitol offices, was described by a congressional Republican aide familiar with what was proposed. President Obama’s liaison to Congress, Rob Nabors, also was at the meetings. Obama seeks new unilateral -- and permanent -- power to raise debt limit...

At a news conference after the meeting, Boehner revealed no specifics of the White House plan, but said generally there had been “no substantive progress” in talks over the past two weeks. He also accused the White House and Democrats of refusing to offer specific spending cuts.

The White House and congressional leaders are trying to prevent the combination of more than $500 billion in automatic tax hikes and spending cuts from taking place at the start of January. The impact is seen as potentially further damaging the nation’s fragile economy.

According to the congressional Republican source, what Geithner did offer Boehner and other congressional leaders is a plan that would instead call for $1.6 trillion in tax hikes — all upfront — in exchange for $400 billion in spending cuts later. The proposal also would extend the 2-percentage-point payroll-tax cut and allow as much as $50 billion in stimulus spending on infrastructure projects.

The only entitlement changes they proposed came from the president’s budget, said the aide, who emphasized the White House offer is not just unrealistic, but unbalanced.

"They also want a permanent, unlimited debt-limit increase — for free," the aide added. That was a reference to a request that Congress give up its authority over federal borrowing to avoid another showdown over increasing the nation’s borrowing authority. The government is expected to hit the limit as early as next month.

“No additional cuts or reforms,” the aide said of the plan, though it would also boost spending to extend unemployment benefits and delay looming cuts to Medicare payments to doctors.

In averting the fiscal cliff, the plan would prevent the $109 billion in automatic sequesteratioin spending cuts set to kick in on Jan. 2.

But the aide complained: “There were only seven weeks between Election Day and Christmas. The White House has now completely wasted three of them. After weeks of negotiations, they just demanded all of their favorite proposals, with no sign of compromise whatsoever.”

The Congressional Budget Office has predicted that if the fiscal cliff is not avoided, the U.S. unemployment rate could rise to 9.1 percent by the end of next year, compared to 7.9 percent now.

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