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The White House plan would permanently extend Bush-era tax cuts on household 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.
On spending, the two sides are also converging.
The White House says the president’s plan would cut spending by $1.22 trillion over 10 years, compared with $1.2 trillion in cuts from the Republicans’ initial offer. Of that, $800 billion is cuts to programs, and $122 billion comes from adopting a new measure of inflation that slows the growth of government benefits, especially Social Security. The White House is also counting on $290 billion in savings from lower interest costs on a reduced national debt.
The White House plan would also extend unemployment benefits, include new infrastructure spending, and extend the debt limit for two years. Despite those elements of the proposal, you'd think Republicans would be pleased that President Obama is now proposing to extend some of the Bush tax cuts on the wealthy as well as cutting Social Security benefits. But not pleased enough to say yes:
Senior Republican aides described the latest offer as a positive step but said the speaker has rejected the president’s counteroffer as “unbalanced.”
But while he might not be prepared to accept President Obama's offer, Boehner's office released a statement hinting at how giddy they must actually be:
"Any movement away from the unrealistic offers the president has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced," said Boehner spokesman Brendan Buck. "We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem."
Ah yes, the old "step in the right direction" statement. In other words, it's time to move the goal posts. They've got President Obama where they want him—at the negotiating table. They weren't so happy when he was applying public pressure on them to extend middle-class tax cuts with no strings attached. But now that he's willing to deal behind closed doors, they've got to be thrilled. And as long as they believe President Obama is desperate for a deal, they'll hold out until they get every concession they can possibly get.