New offer on fiscal cliff raises hopes

WASHINGTON - Agence France-Presse

In a major counteroffer that moves the White House and congressional Republicans closer to resolving the “fiscal cliff” standoff, President Barack Obama is now seeking $1.2 trillion from higher tax revenues, including increased rates on those earning more than $400,000 a year, a source familiar with the negotiations said Dec. 17.

The maneuvering is aimed at reaching an agreement to rein in deficit spending before an automatic year-end hike in taxes for nearly all wage-earners hits, as well as deep spending cuts in defense and in domestic programs across the government.

Economists have warned that the combination of the two, set to begin at year’s end, could send the economy into recession.

Jan 1 deadline

Obama offered House Speaker John Boehner his latest counter-proposal in a tortuous negotiating process now homing in on a Jan. 1 deadline, offering a major compromise on the income level affected by his demand to raise taxes on the rich.

The latest plan would raise the threshold at which higher rates would come into force to households earning $400,000 a year and above, up from the $250,000 level on which Obama had earlier insisted.

Obama’s new proposal offers $1.2 trillion in revenue hikes and an identical level in spending cuts
designed to trim the deficit, a source familiar with the plan, designed to avert the “fiscal cliff” crisis, said.

The president had initially insisted in $1.6 trillion in higher revenue from raising taxes and then lowered the number to $1.4 trillion. Boehner has now reportedly offered $1 trillion in new revenues.

Details of a new offer emerged after Obama and Boehner held their latest meeting, a 45-minute encounter at the White House on Dec. 17, raising hopes that a deal can be struck to put before Congress before the year-end deadline.