“If we’re serious about reducing our deficit while still investing in things like education and research that are important to growing our economy – and if we’re serious about protecting middle-class families – then we’re also going to have to ask the wealthiest Americans to pay higher tax rates,” Obama said of Americans making $200,000 or more. “That’s one principle I won’t compromise on.
“After all, this was a central question in the election.”
Yes, it was. And, yes, he did — compromise that is.
Meeting House Speaker John Boehner somewhere slightly right of center where we can usually find him, Obama has proposed raising tax rates on income above $400,000 instead, abandoning his call for the renewal of a payroll tax cut, agreeing to entitlement cuts, and changing the cost-of-living calculator for the Social Security program.
Boehner, of course, was pleased with the compromise, but wanted even more:
“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,” Boehner spokesman Brendan Buck said in a statement. “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.”
The $2.4 trillion proposal marks the first time that Obama has given ground on income tax rates. He made another significant move in Boehner’s direction by meeting the speaker’s demand for an equal amount of spending cuts to new revenue — a concession that could prove instrumental in reaching a final deal, although the speaker’s aides are disputing the White House’s claim of a dollar-for-dollar match.
Obama proposed $1.2 trillion in new revenue, down from his previous offer of $1.4 trillion. And he offered $1.2 trillion in spending cuts, including $400 billion in entitlement savings, which is an increase of $50 billion.
Time will tell if the compromise saves fiscal cliff negotiations from stalling, or if Boehner will continue to push for more.