Washington Last week began with high hopes of "fiscal cliff" deal making but ended with the reality that both sides are galaxies apart. Now the negotiations enter another time-sensitive week, and with few illusions as to where each side stands. The talks are going to have to move a great deal before a compromise can be reached.
This week, negotiations are expected to continue behind the scenes between the White House and Republican leaders. In addition, President Obama has a meeting scheduled Tuesday with several governors -- including Govs. Scott Walker, R-Wisc., and John Hickenlooper, D-Colo. -- as well as a speech on Wednesday to the Business Roundtable where he will focus on selling his side of the debate, a task that Treasury Secretary Timothy Geithner was charged with on the Sunday political shows.
The public posturing picked up on Sunday television where it left off at the end of last week, with politicians attempting to sell their sides of the story while evading any semblance of willingness to budge on their respective stances. And time is running out. There is less than a month before a series of automatic spending cuts and tax increases are set to go into effect, which economists predict will be devastating for the economy.
In his appearances on all five networks' Sunday political shows, Geithner laid out the White House's position, just as he did during meetings on Capitol Hill last week.
"There's no path to an agreement that does not involve Republicans acknowledging that rates have to go up for the wealthiest Americans," Geithner said on CBS News' "Face the Nation".
For the Republicans', House Speaker John Boehner defended his offer, which he called serious, and flatly rejected President Obama's proposal. "We've put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing. They've actually asked for more revenue than they have been asking for the whole entire time," Boehner said.
As far apart as Geithner and Boehner are, those are the current parameters: the GOP wants to extend all of the Bush-era tax cuts, which expire at the end of the year; the president wants to extend all but the cut for those making more than $250,000. In addition, the president's proposal would increase the estate tax to 45 percent. It's a plan that would total $1.6 trillion over ten years, the White House says.
"The president is asking for $1.6 trillion worth of new revenue over 10 years, twice as much as he has been asking for in public," Boehner said Sunday. "It was not a serious offer."
Sen. Lindsey Graham, R-S.C., took the same position as Boehner and other Republicans who oppose increases to tax rates but are open to generating new revenue by limiting tax deductions. "I'll only do that if we do entitlement reform, and the president's plan when it comes to entitlement reform is just, quite frankly a joke," Graham, R-S.C., said on "Face the Nation."
The administration put forward a spending reduction proposal that is unacceptable to Republicans. In addition to $600 billion in cuts, which Geithner said includes minor changes to Medicare benefits for the wealthy in addition to reductions in farm subsidies, they pointed to $1 trillion of spending cuts Democrats agreed to support last year without any increases to revenue. Republicans laughed, literally.
"[T]hey wanted to extend unemployment benefits, they wanted a new stimulus program for infrastructure, they wanted to extend some other tax breaks," Boehner said of the White House's proposal. "And all of this stimulus spending would literally be more than the spending cuts that he was willing to put on the table."
Additionally, the White House wanted the ability to raise the debt ceiling without Congressional approval. "I've just never seen anything like it," Boehner added. "We're nowhere."
While the president's proposal -- minus a host of details regarding tax deductions and spending cuts - is on the table, the Republicans' proposal is even more veiled. Geithner said Boehner needs to respond with an offer.
"[I]f they want to come back to us and say we'd like you to do this differently, do more of this, then they should lay that out for us," Geithner said.
When asked about specifics on "Fox News Sunday," including if he would propose eliminating the home mortgage deduction, Boehner told host Chris Wallace, "Listen, there are lots of ways to get out there. Now, I'm not going to debate his or negotiate with you."
As for spending cuts, Boehner, like the Democrats, looked to past Republican proposals. He said Republican ideas are laid out in the 2011 House budget drafted by Rep. Paul Ryan, R-Wis., which would make massive changes to Medicare and deep cuts to spending programs. It is a plan that did not get past the Senate.
Acknowledging the delicate dance that negotiators often plan when working to reach a deal, Geithner said he thinks a deal would be reached, but not before both sides play "a lot of political theater."
On CBS' "Face the Nation, economist Mark Zandi also sounded optimistic about both sides reaching a deal. "I think the political stars are aligned. The president has his legacy. He's a second-term president and I think he really wants to address this and I think the Republicans want to address it as well. So I think we'll get it together," he said.
Meanwhile, CBS News' political director John Dickerson pointed out the president feels like he is in a better position than Boehner. He won reelection running on raising tax rates on the wealthy and public polls suggest that Republicans would be blamed if a deal is not "You have Republicans trying to figure out their...place in the world," Dickerson said.
Despite the public gulf and the tough rhetoric from both sides, negotiations are still ongoing. And, as Zandi pointed out, the way this is all playing out shouldn't come as a surprise considering lawmakers are with the politically-charged issues of taxes and entitlements while on a tight deadline.
"[T]hese are really big issues we're trying to nail down here," Zandi said. "It would be hard for me to believe that we could come to kumbaya over these issues.
"[I]f we nail this down - and...I think we will - we're going to be off and running."
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