Fiscal Cliff Talks Stall as Democrats, GOP Dig In on Tax Rates

Nov 29, 2012 11:54am
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House Minority Leader Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., Speaker of the House John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., speak to the media at the White House Nov. 16, 2012, in Washington. It was the last in-person meeting between the President and Republicans on how to avoid the fiscal cliff.  (Roger Wollenberg/Getty Images)

Republicans and Democrats may be privately working to avoid the fiscal cliff, but in public they’re digging into conflicting positions on the all-important issue of tax rates for the wealthiest two percent of Americans. And leaders from both parties say they want a “serious proposal” from the other side.

“No substantive progress has been made in the talks between the White House and the House over the last two weeks,” House Speaker John Boehner, R-Ohio, told reporters after a short phone conversation with President Obama Wednesday night and a meeting with Treasury Secretary Timothy Geithner Thursday morning.  “It’s time for the president and Congressional Democrats to tell the American people what spending cuts they’re really willing to make,” he said, pointing out that Republicans are willing to raise more government revenue through comprehensive tax reform, but not by raising tax rates on the wealthy.

That has become a sticking point in the negotiations as President Obama and Democrats have insisted that Bush-era tax cuts be extended for all but the wealthiest two percent of Americans as part of a deal to avoid the “fiscal cliff” cocktail of expiring tax measures and spending cuts set to kick in Jan. 1st.

“I don’t understand his brain,” said Senate Majority Leader Harry Reid, told of Boehner’s argument that the ball is in Democrats’ court to provide a plan.

Reid, appearing after his own meeting with Geithner, said, “Democrats are all of the same page.” “For two weeks we have been waiting for a serious offer from Republicans…..we need a proposal from them,” he said.

Earlier Thursday, Reid held up the examples of House Republicans like Rep. Tom Cole of Oklahoma and Tim Scott of South Carolina, who in recent days have signaled that there might be a small group of House Republicans willing to agree to a short-term tax hike on the wealthy in order avoid the fiscal cliff.

“Prominent Republicans are calling on Speaker Boehner to end the suspense for millions of these American families,” Reid said. “I would bet a lot of his Republicans would vote for it would bet a majority of his Republicans would vote for it.”

A spokesman for Rep. Scott said the congressman “is not on board with any plan that raises the rates, and isn’t asking anyone else to be.” Cole himself has indicated he does not want to increase taxes on the top two percent necessarily. He believes the debate is a cloud that hangs over the GOP in the larger fiscal cliff negotiations.

The House of Representatives most recently voted down the Senate plan on Aug. 1st, when 236 Republicans and 10 Democrats voted against raising the rates on the wealthiest two percent of Americans.

But Reid seized on the two recent House Republicans’ comments, adding that Boehner should listen to the “advice of reasonable members of their own caucus,” in order to end the standoff.

Boehner said Wednesday that he disagrees with Cole after the Oklahoma congressman told colleagues to give in on tax rates this year in order to avoid the fiscal cliff, the cocktail of tax hikes and spending cuts set to kick in Jan. 1. Cole said Republicans could work on larger tax reform next year.

“I told Tom earlier in our conference meeting that I disagreed with him,” Boehner said Wednesday when asked Cole’s proposal is worthy of consideration. “The goal here is to grow the economy and control spending. You’re not going to grow the economy if you raise tax rates on the top [two percent]. It’ll hurt small businesses, it’ll hurt our economy. That’s why this is not the right approach.”

Leaders of both parties are set to meet separately today with Geithner and the White House chief negotiator Rob Nabors. That meeting clearly did not satisfy Boehner. Senate Minority Leader Mitch McConnell, R-Ky., in advance of his meeting, said everything the White House has put down on the table so far has been “counterproductive,” and he hopes that  Geithner brings “a specific plan from the president” with him today.

“The only reason Democrats are insisting on raising rates is because raising rates on the so-called rich is the holy grail of liberalism,” McConnell said on the floor of the Senate this morning. “The holy grail of liberalism. Their aim isn’t job creation. They’re interested in wealth destruction. Not job creation, but wealth destruction.”

McConnell concluded by quipping that the “the president needs to realize that he wasn’t elected president of the hard left of the Democratic party, he was elected president of the United States.

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