Nov. 30 (Bloomberg) -- House Speaker John Boehner said budget talks are at a “stalemate” and that the Obama administration’s tax-and-spending offer yesterday wasn’t a “serious” proposal.
“Right now we’re almost nowhere,” Boehner, an Ohio Republican, told reporters in Washington.
Less than an hour earlier, President Barack Obama warned of “prolonged negotiations” ahead on how to avoid more than $600 billion in spending cuts and tax increases, known as the fiscal cliff, scheduled to begin in January.
In a campaign-style appearance with a toy factory as a backdrop, Obama said quick action by lawmakers to extend George W. Bush-era tax cuts for middle-income Americans would give time for tougher talks on cutting spending.
Boehner said Obama’s proposal to let tax rates increase for top earners would boost taxes on some small businesses.
“Raising taxes on small businesses instead of taking a balanced approach that also cuts spending is wrong,” Boehner said. “It’s only going to make it harder for our economy to grow.”
Obama went to Hatfield, Pennsylvania, to visit a facility of the Rodon Group, which makes Tinkertoys and K’NEX building sets.
“In Washington, nothing’s easy so there’s going to be some prolonged negotiations,” the president said. “Where the clock is really ticking, right now, is on middle-class taxes.”
Treasury Secretary Timothy Geithner held separate meetings with congressional leaders yesterday to offer a plan to trade $1.6 trillion in tax increases for $400 billion in unspecified entitlement program cuts, Republican congressional aides said.
Republicans complained the plan was little more than a rehash of old budget proposals.
Obama is calling for continuing tax cuts for middle-income households. He and congressional Democrats insist the cuts should be allowed to expire for the top 2 percent of taxpayers.
Republicans reject higher tax rates for all income levels. They are seeking spending cuts and an overhaul of entitlement programs.
The fiscal plan presented by Geithner yesterday was modeled on Obama’s budget proposal from February and includes at least $50 billion in economic stimulus spending for this fiscal year, according to Republican aides. It would permanently increase the U.S. debt limit to avoid the need for congressional action, said one of the aides, who wasn’t authorized to speak publicly.
The Congressional Budget Office has said that if Congress doesn’t avert the fiscal cliff, the economy might slip into recession next year and boost the unemployment rate to 9.1 percent in the fourth quarter of 2013, compared with 7.9 percent now.
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