WASHINGTON (AP) — Republicans aren’t budging on tax rates, and Democrats are resisting steps like raising the eligibility age for Medicare. Negotiations on averting a year-end fiscal train wreck combining big automatic tax hikes and sweeping spending cuts again appear stalled.
There are less than three weeks before the government could careen off this “fiscal cliff,” but the chief GOP negotiator, House Speaker John Boehner, R-Ohio, said Wednesday that “serious differences” remain between him and President Barack Obama after an exchange of offers and a pair of conversations this week.
Boehner spoke after a closed-door meeting with fellow GOP lawmakers in which he advised them not to make plans for the week after Christmas.
Neither side has given much ground, and his exchange of proposals with Obama seemed to generate hard feelings more than progress. The White House has slightly reduced its demands on taxes — from $1.6 trillion over a decade to $1.4 trillion — but isn’t yielding on demands that rates rise for wealthier earners.
Boehner responded with an offer very much like one he gave the White House more than a week ago that offered $800 billion in new revenue, half of Obama’s demand. Boehner is also pressing for an increase in the Medicare eligibility age and a stingier cost-of-living adjustment for Social Security recipients.
Boehner spokesman Michael Steel said the two men did not have any follow-up talks Wednesday.
“There were some offers that were exchanged back and forth yesterday, and the president and I had a pretty frank conversation about just how far apart we are,” Boehner said after his meeting with fellow Republican lawmakers. “He said it’s looking like trench warfare,” said Rep. John J. Duncan Jr., R-Tenn., referring to Boehner.
Federal Reserve Chairman Ben Bernanke weighed in as well. He said, “Clearly, the fiscal cliff is having effects on the economy,” the uncertainty affecting consumer and business confidence and leading businesses to cut back on investment.
There is increasing concern about a Dec. 31 deadline to stop the expiration of Bush-era tax cuts and the start of across-the-board spending cuts that are the result of Washington’s failure to complete a deficit-reduction deal last year. Even if an agreement can be reached, the halting pace of negotiations is jeopardizing chances that it could be written into proper legislative form and passed through both House and Senate before the new Congress convenes on Jan. 3.
Both sides accuse the other of slow-walking the talks. Democrats say Boehner is unwilling to crack on the key issue of raising tax rates on family income over $250,000 because he’s afraid of a revolt on his right flank and from younger, ambitious members of his leadership team.
“I do have an increasing concern that the speaker … is trying to string this out until January 3rd because that’s when he would be re-elected as speaker,” Rep. Chris Van Hollen of Maryland, ranking Democrat on the House Budget Committee, told The Associated Press. “And I think he’s nervous that if he can’t get a majority of his House Republican members to support a reasonable agreement that that could put his speakership election in jeopardy. And so that might cause him to try and string these talks.”
Many conservatives say they would oppose a deficit-cutting package negotiated by Boehner that included higher tax rates.
“I’ll say no, because the focus has got to be on economic growth,” said Rep. Jim Jordan, R-Ohio. “The simple fact is raising taxes is not going to grow our economy.”
Others wouldn’t rule it out completely.