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But Senate Minority Leader Mitch McConnell, R-Ky., focused instead on getting a deal he said was in hand on the tax side of the cliff. He said lawmakers should move ahead and set aside the sequester and other issues for another day.
And while Obama’s comments caught Republicans by surprise, at least substantively they were largely consistent with previous statements he has made about his continued desire to put together a large, balanced deal to reduce the deficit, even if it has to be done in separate pieces.
In talks with Boehner, Obama had sought a tax increase of $1.3 trillion alongside about $900 billion in spending cuts — not counting interest savings. Boehner was open to a deal that raised taxes by $1 trillion and cut spending by $1 trillion.
In the emerging stopgap deal crafted by Senate leaders, tax rate increases would raise about half the amount of revenue Obama had originally wanted. However, the agreement is constructed in a way that potentially hundreds of billions of dollars in additional revenue could be raised in the future by other means such as limiting the value of tax breaks for people in the higher tax brackets.
However, the structure of the deal, with a permanent extension of tax rates, could be a big barrier to getting another bite at the tax apple next year. That’s because any such hikes would almost assuredly be an explicit violation of Grover Norquist’s anti-tax pledge. The emerging deal, and the grand bargain sought earlier by Obama, would score as a tax cut of several trillion dollars relative to current law. That won’t be the case once Obama signs a permanent extension.
Emily Holden and Sam Goldfarb contributed to this report.