The White House says it remains “hopeful” that the fiscal cliff will be averted, despite comments from Senate Minority Leader Mitch McConnell, R-Ky., that the talks are at an “impasse.”
“We remain hopeful and optimistic that we can reach a deal,” White House Press Secretary Jay Carney told reporters at the White House. “We are engaging with Congress. ... With a little give, we can get it done.”
But Carney poured cold water on the key Republican ask: that new revenue in any deal come from slicing tax breaks for the highest earners, not from higher rates. Rate increases and caps on deductions are both needed to reach a deficit reduction deal, Carney said.
President Barack Obama wants about $1.6 trillion in tax revenue from people making more than $250,000, as part of a $4 trillion deficit reduction package; some of that would come from higher rates, some from shrinking deductions. But that’s twice the sum that Obama and Speaker John A. Boehner, R-Ohio, discussed during their “grand bargain” talks in 2011.
The GOP, meanwhile, has complained that Obama hasn’t yet committed to serious entitlement changes even as they are being asked to give in on revenue.
Carney said Obama phoned Boehner and Senate Majority Leader Harry Reid, D-Nev., over the weekend to discuss the cliff, and the president’s staff continues to have conversations with their counterparts on Capitol Hill. Beyond that, Carney offered little new as to the White House’s position and thinking on the topic.
McConnell, speaking on the Senate floor, complained that the president hasn’t yet proposed a plan that can pass — while also urging him to support an approach like that proposed by a majority of the National Commission on Fiscal Responsibility and Reform, known as the Simpson-Bowles commission, which would raise revenue while lowering tax rates.
“We have been open to revenue by closing loopholes as long as it’s tied to spending cuts and pro-growth tax reform that broadens the base and lowers rates,” McConnell said. “This is the model laid out by the Simpson-Bowles commission, and it’s a model both parties should step forward and embrace. Without compromising our principles, we put skin in the game and recognition of the fact that, while Democrats don’t run this town, neither do we.”
McConnell added, however, that the talks remain “at an impasse,” blaming a “Thelma and Louise crowd” on the far left who “dream about higher taxes and the bigger government it will pay for.”
McConnell called on Obama to take on the left wing of his party.
“He’s the one who has to present a plan for success. So we’ll continue to wait on the president and hope that he has what it takes to bring people together and forge a compromise. If he does, we’ll get there, and if he doesn’t, we won’t. It’s that simple.”
Talking to Mr. Bowles
Boehner also gave a shout-out to Simpson-Bowles in a statement, although not to the fiscal-commission plan per se. (House Republican leaders rejected the commission’s plan when it was released).