U.S. House Speaker John Boehner and President Barack Obama appear no closer to a budget agreement with three weeks left to avert more than $600 billion in spending cuts and tax increases.
Obama this week insisted that no deal is possible without letting income tax rates rise for high earners, while Boehner said the administration needs to get “serious” about spending cuts.
“There’s no progress to report,” Boehner told reporters yesterday in Washington, referring to talks with Obama to avert tax increases and spending cuts starting in January that could send the U.S. into recession. Such changes are known as the fiscal cliff.
Boehner, calling it a “wasted week” in the talks, didn’t rule out the possibility of accepting a maximum tax rate between the current 35 percent and the 39.6 percent Obama wants for top earners.
“There are a lot of things that are possible to put the revenue the president seeks on the table,” the speaker said yesterday when asked by reporters whether he would agree to a smaller rate increase if it protected small businesses.
He later issued a statement reiterating the tougher stance he has taken on rates. “As I’ve said many, many, many times: I oppose tax rate increases because tax rate increases cost American jobs,” according to the statement. “That has not changed, and will not change.”
In his earlier comments to reporters, Boehner criticized Obama’s posture in the talks.
An agreement won’t be possible “if the president insists on his position, insists on my way or the highway,” he said. “That’s not the way to get an agreement.”
The Obama administration didn’t respond to requests for comment on Boehner’s remarks. The president met with House Minority Leader Nancy Pelosi, a California Democrat, at the White House yesterday to discuss a variety of issues including the budget, according to a White House official.
Pelosi didn’t rule a compromise on top tax rates. “It just depends on how much money you can get,” she said at a press conference yesterday. “It’s not about the rate, it’s about the money.”
Boehner earlier this week made a proposal to Obama that included $800 billion in new revenue from revisions that would eliminate unspecified tax breaks. Obama rejected Boehner’s proposal, which would raise the Medicare eligibility age and slow Social Security cost-of-living increases.
‘If He’s Serious’
“It’s time for the president, if he’s serious, to come back to us with a counteroffer,” Boehner said yesterday.
U.S. stocks rose. The Standard & Poor’s 500 Index rose 0.3 percent to 1,418.07, the highest level since Nov. 6, at 4 p.m. New York time. The Dow Jones Industrial Average gained 81.09 points, or 0.6 percent, to 13,155.13, extending its weekly advance to 1 percent. Both gauges advanced for a third week, the longest winning streak since August.
Treasuries fell for the first time in four days. Ten-year note yields rose four basis points, or 0.04 percentage point, to 1.62 percent at 4:59 p.m. New York time, according to Bloomberg Bond Trader data.
Boehner yesterday described as “reckless talk” Treasury Secretary Timothy Geithner’s statement earlier this week that the administration is “absolutely” willing to go over the fiscal cliff in January if Republicans don’t agree to raise tax rates for top earners.
Ready for Concessions
In a Bloomberg Television interview this week, Obama signaled he’s ready to make concessions on entitlement programs, which include Medicare. “I don’t expect Republicans to agree to any plan where they’re just betting on the come that entitlement reform will happen,” he said.
Boehner has previously said his party won’t agree to higher tax rates for any income level.
Two Senate Democratic leaders signaled this week that they may be willing to trade an entitlement spending overhaul to secure a deficit-reduction deal.
Dick Durbin of Illinois, the second-ranking Senate Democrat, said he might reluctantly be open to expanding means-testing for Medicare eligibility -- charging more to higher-income seniors. New York Senator Chuck Schumer said he wouldn’t rule out changing entitlements.
Republicans “want something to put up on the wall and say, ‘OK, we gave on taxes, they gave on’” entitlements, Durbin said in an interview. “We may end up facing it as the only way out of this.”
Some House Republicans have said that they are willing to accede to Obama’s demand to lock in the George W. Bush-era tax cuts this month for 98 percent of taxpayers.
A Republican leader of a lawmakers’ petition to consider all revenue options, Representative Mike Simpson of Idaho, said he could accept higher tax rates for married couples earning more than $500,000 a year in exchange for an overhaul of entitlement programs.
Obama wants to let tax rates increase for individuals’ income higher than $200,000 annually and for married couples’ income exceeding $250,000 a year.