Makings Of A U.S. Fiscal Deal Behind Hot Rhetoric
|STEVEN R. HURST, Associated Press|
Those conflicts aside, however, proposals from both sides already have significant overlap in their competing budget proposals that could form the basis for a long-term deal that would avert what some economists call a potential catastrophe.
The Obama administration and
Economists warn the fiscal cliff, a result of prior failures of
If the talks succeed, it probably will be because Boehner, the most powerful Republican in
The possible makings of a deal could borrow heavily from a near-bargain last year during debt-limit negotiations.
Then, Obama was willing to reduce cost-of-living increases for federal
"I'm prepared to make some tough decisions on some of these issues," Obama said, "but I can't ask folks who are, you know, middle class seniors who are on
"I'm happy to entertain other ideas that the Republicans may present," he added in an interview with
At the core, the negotiations center on three key points: whether tax rates for upper income taxpayers should go up, how deeply to cut spending on entitlements such as
Boehner countered: "If the president really wants to avoid sending the economy over the fiscal cliff, he has done nothing to demonstrate it."
Tax rates have emerged as one of the most intractable issues, with Obama insisting the rates on the top 2 percent of earners must go up and Boehner standing steadfast that they must not.
Boehner, instead, has proposed raising
On Tuesday, the president said he would consider lowering rates for the top 2 percent of earners _ next year, not now _ as part of a broader tax overhaul effort that would close loopholes, limit deductions and find other sources of government revenue. "It's possible that we may be able to lower rates by broadening the base at that point," Obama said.
Another idea that gained currency during the Obama-Boehner talks last year would change the annual inflation measure used for
Many economists and government budget specialists believe the system is a more accurate measure of inflation because it takes into account changes in purchasing behavior.
The two sides are also close, at least in theory, on curbing spending on a host of miscellaneous programs, as well as new fees. These could lead to higher airline ticket prices, for example, an end to Saturday mail delivery, fewer food stamps and lower farm subsidies.
Republicans claim they could glean
So far, the public seems ready to hold Republicans responsible if negotiations fail. A new
Forty-nine percent don't believe Obama and
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