The re-elected U.S. president and the House Speaker spoke by phone Wednesday about the “fiscal cliff”, raising the prospect of fresh negotiations to prevent tax increases and spending cuts set to kick in with the new year.
“We have got to cut spending and I believe it is appropriate to put revenues on the table,” Boehner told reporters on Wednesday. “Now, the revenues that we are putting on the table are going to come from guess who? The rich.”
He added, “There are ways to limit deductions, close loopholes and have the same people pay more of their money to the federal government without raising tax rates, which we believe will harm our economy.”
The president reiterated that Republicans have to ensure no one except the wealth will face taxes increase, before seek for agreement on tackling the nation’s chronic federal deficits and debt.
“If we can get the leadership on the Republican side to take that framework, to acknowledge that reality, then the numbers actually aren’t that far apart,” Obama said in one of his recent interviews.
“Another way of putting this is we can probably solve this in about a week. It’s not that tough, but we need that conceptual breakthrough,” he said.
Treasury Secretary Timothy Geithner predicted that there would be no agreement without higher tax rates on on the top 2% and without a change in congressional rules making it harder to block an increase in the U.S. debt ceiling, writes Reuters.
“There is no prospect (for) an agreement that doesn’t involve rates going up on the top 2 percent of the wealthiest Americans,” he told reporters.
As CNN reports, in remarks to business leaders on Wednesday, Barack Obama said the Speaker and Republicans have to take the first step.
“I think there is recognition that maybe they can accept some rate increases as long as it is combined with serious entitlement reform and additional spending cuts,” the president said.
“And if we can get the leadership on the Republican side to take that framework, to acknowledge that reality, then the numbers actually aren’t that far apart,” he continued, adding that “we can probably solve this in about a week – it’s not that tough.”
Republican Senator Tom Coburn of Oklahoma had announced that he could accept increase of tax rates as part of a long-term solution to the threat posed by spiraling U.S. debt.
The Oklahoma politician suggested the path to improvement would require at least a $9 trillion package of spending cuts and tax increases over a decade, rather than the $4 trillion being discussed now.
“Personally I know we have to raise revenue. I don’t really care which way we do it. Actually, I would rather see the rates go up than do it the other way because it gives us a greater chance to reform the tax code and broaden the base in the future,” Coburn said.
Analysts say that without the fiscal cliff looming, the White House budget office has urged all federal agencies to begin planning for upcoming automatic spending cuts that will start taking effect in January if the agreement is not reached.