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President Obama and House Speaker John Boehner met privately at the White House on Sunday to discuss a resolution to the manufactured fiscal cliff curb crisis. Both sides released an identical statement following the discussion: "the lines of communication remain open.”
However, "senior aides" provided the Washington Post with what they say are the "elements of a deal" which are emerging, either as a real possibility, or a trial balloon.
Fresh tax revenue, generated in part by raising rates on the wealthy, as Obama wants, and in part by limiting their deductions, as Republicans prefer. The top rate could be held below 39.6 percent, or the definition of the wealthy could be shifted to include those making more than $375,000 or $500,000, rather than $250,000 as Obama has proposed.
Obama wants $1.6 trillion over the next decade, but many Democrats privately say they would settle for $1.2 trillion. Boehner has offered $800 billion, and Republicans are eager to keep the final tax figure under $1 trillion, noting that a measure to raise taxes on the rich passed by the Senate this summer would generate only $831 billion.
Savings from health and retirement programs, a concession from Democrats necessary to sell tax hikes to GOP lawmakers. Obama has proposed $350 billion in health savings over the next decade. Boehner has suggested $600 billion from health programs, and an additional $200 billion from using a stingier measure of inflation, reducing cost-of-living increases for Social Security recipients.
Additional savings sufficient to postpone roughly $100 billion in across-the-board agency cuts set to hit in 2013, known as the sequester, and to match a debt-limit increase. The sequester, perhaps paired with an automatic tax hike, could then serve as a new deadline, probably sometime next fall, for wringing additional revenue from the tax code and more savings from entitlement programs.
A possible compromise on whether the top tax rates would revert to Clinton-era levels or somewhere in between started being floated at the end of last week, as did raising the Medicare eligibility age, something that at least Democratic leader Nancy Pelosi has strongly and publicly opposed. Congressional Democrats have also insisted that Social Security be out of the picture entirely, but that reduction in cost-of-living increases, the chained CPI, has never explicitly been yanked off the table.
Of course, there's still the chance to do nothing until the new Congress is seated next year. To step off of the curb and let the tax rates revert. But with Obama and Boehner now conducting private meetings and engaging personally, that seems less and less likely.
Originally posted to Joan McCarter on Mon Dec 10, 2012 at 08:15 AM PST.