WASHINGTON — With the country on the brink of a “fiscal cliff” that could plunge the economy back into recession, the partisan rhetoric over taxes and spending intensified on Tuesday, with both sides attempting to pin blame as the year-end deadline quickly approached.
The likelihood of a deal before Christmas seemed to diminish Tuesday, as both sides acknowledged they were running out of time.
“Christmas is two weeks from today everybody,” Senate majority leader Harry Reid, a Democrat, reminded, saying that a deal remained a possibility but “not something we can do easily.”
During a floor speech Tuesday, House Speaker John A. Boehner, a Republican, put the onus on President Obama to put forward a plan that could win passage in both chambers of Congress — a responsibility that Democrats refused to shoulder on their own.
“We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the ‘balanced approach’ that he promised the American people,” Boehner said.
“The longer the White House slow-walks this process, the closer our economy gets to the fiscal cliff,” Boehner said. “Right now the American people have to be scratching their heads and wondering, ‘When is the president going to get serious?’ ”
Obama was back in Washington Tuesday, after traveling to Michigan the day before to sell the American public on his plan to allow tax rates to rise on the wealthy while preserving tax cuts for the middle class.
“What we haven’t seen from Republicans, to this day, is a single specific proposal on revenue,” said White House spokesman Jay Carney. “In fact, we’ve seen less specificity from Republicans on spending cuts than the president himself has proposed.”
“There is a deal out there that’s possible, and we do believe that the parameters of a compromise are pretty clear,” Carney said. “I understand and I sympathize with the desire for more detail,” he said. “If it weren’t for the broader interest here, which is in trying to allow some space for the parties to see if they can achieve a compromise, I’d be spilling my guts from here.”
Obama has been steadfast in his position of raising tax rates on the wealthy — which is a certainty if the Bush-era tax cuts are allowed to expire without congressional intervention — as part of a proposal that would raise $1.4 trillion over 10 years. The White House had proposed $1.6 trillion in new revenues, but scaled back the amount on Tuesday, the Wall Street Journal reported.
But GOP officials dismissed the offer as a delaying tactic, the Journal said.
Republicans have been just as adamant on deep spending cuts, particularly on entitlements such as Medicare, with Boehner proposing cuts of up to $1.4 trillion, partly by raising the eligibility age for Medicare from 65 to 67, and slowing annual benefit increases for Social Security recipients. Boehner has called for $800 billion in new revenues, but has not specified from where the money would come.
Tuesday’s theatrics didn’t necessarily mean that a deal was not in the works, but it was unclear whether one would be announced before Christmas. Most members of Congress have not been privy to the details being negotiated by Boehner and Obama.
Democrats intimated that Boehner is under pressure by his party’s conservatives to remain hawkish on spending.
If a deficit-reducing deal is not reached by the end of the year, $1.2 trillion in automatic cuts, roughly equally between defense and domestic programs, and spread out over a decade, will begin in January. The first round amounts to $110 billion.
On the horizon is a double whammy of tax increases and deep spending cuts that would siphon more than $500 billion from the US economy next year, and trillions of dollars more over the next decade, unless Congress and the White House intervene. If they don’t, the economy could be hit with another recession, according to the nonpartisan Congressional Budget Office.