The News Courier in Athens, Alabama

State and Nation

December 18, 2012

Obama backs off hard lines in search of compromise

(Continued)

"I understand that I don't expect the Republicans simply to adopt my budget," he said during his post-election news conference last month. "That's not realistic. So, I recognize we're going to have to compromise."

The talks, facing a looming deadline, seek to avoid across-the-board tax hikes for nearly all wage-earners as well as spending cuts at the Pentagon and in domestic programs that are set to kick in at the start of the new year. Economists inside and outside the government have warned that the combination of the two — the "fiscal cliff" — could stall a weak recovery and threaten a new recession.

Obama's steps toward Boehner came after the House speaker took a plunge in a call to Obama on Friday — while the nation was focused on the horror of a mass murder in Newtown, Conn. — and agreed to accept an increase in tax rates for taxpayers who earn more than $1 million. Boehner's plan would raise about $1 trillion in taxes over 10 years.

That was a barrier-breaking moment, changing the negotiations from a fundamental debate over whether tax rates should rise at all to quibbling over who should pay them.

There are still plenty of disputes to iron out. And people familiar with Obama's proposal were careful not to describe it as his final offer.

The Obama plan seeks $1.2 trillion in revenue over 10 years and $1.2 trillion in 10-year spending reductions. Boehner aides say the revenue is closer to $1.3 trillion if revenue triggered by the new inflation index is counted, and they say the spending reductions are closer to $930 billion if one discounts about $290 billion in lower estimated debt interest.

"Any movement away from the unrealistic offers the President has made previously is a step in the right direction," Boehner spokesman Brendan Buck said. "But a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced."

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