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Fiscal Cliff Talks May Have Hit Breakthrough Moment

Dec 17, 2012
Originally published on December 17, 2012 7:19 pm

Transcript

MELISSA BLOCK, HOST:

Discussions here in Washington are intensifying between House Speaker John Boehner and President Obama as they try to find an agreement to avert a raft of year-end spending cuts and tax increases. The two men met today at the White House for 45 minutes. NPR's Tamara Keith joins us now from Capitol Hill with an update. And, Tamara, there does seem to have been something of a breakthrough in negotiations. Speaker Boehner agreed to let tax rates rise. President Obama came back with a counteroffer. Where are we right now?

TAMARA KEITH, BYLINE: So, where we are right now, we have on the table an offer from the president. But really what broke this all through was a phone call on Friday between the president and Speaker Boehner where Boehner said he would be open to the idea of allowing tax rates to rise on people earning more than a million dollars a year. Now, this was notable because up until this point he had held firm that tax rates were basically untouchable. Well, by putting tax rates on the table, this broke open a flurry of these offers and counteroffers. So, the speaker said one million. The president had previously argued that everyone earning more than $250,000 a year would have their tax rates rise. The new offer, according to sources familiar with the negotiations is that the president is now saying $400,000 a year would be the cut-off point for taxes to rise. So, it's sort of meeting halfway.

BLOCK: Well, that's on the revenue side. What about on the spending-cut side?

KEITH: The speaker, in his offer on Friday, said he wants a trillion dollars of revenue and a trillion dollars of spending cuts. The president is coming back, and is willing to give a bit on the spending cuts. He's talking about $400 billion in health spending, about 200 billion in discretionary spending. And something that the president had been unwilling to touch before is cost-of-living adjustments, mostly for Social Security. They would change the way these adjustments are made, and that would save about $200 billion over a decade. It's something that the speaker has asked for and it's now something that the president is willing to offer up, as long as there are protections in there for the most vulnerable populations.

BLOCK: Now, the rumor and speculation tonight, Tamara, is that a deal seems to be pretty close. Is that what you're hearing?

KEITH: I think there is certainly optimism out there that this could be the makings of a deal. This source familiar with the president's side of things is saying that, you know, that they've met the speaker more than halfway. Though I did get a note from the speaker's spokesman, Michael Steele - and I'll just read part of it to you. He says: Any movement away from the unrealistic offers the president has made previously is a step in the right direction. But this proposal, which includes 1.3 trillion in revenue for only 930 billion in spending cuts cannot be balanced, and that they hope that they continue working together to find a truly balanced agreement.

BLOCK: And as these new details are emerging, Tam, any reaction from the right or the left?

KEITH: Well, on the left, there's a lot of concern that the president is giving something away with this cost-of-living adjustment that affects Social Security. A lot of people have felt that Social Security shouldn't be on the table. On the right, there's - Speaker Boehner, even before this latest offer from the president, when the details of the speaker's offer came out, he was getting heat for even bringing up the idea of raising tax rates. And also for giving up on the debt ceiling, which is another component of these negotiations.

BLOCK: That's NPR's congressional reporter Tamara Keith. Tam, thanks so much.

KEITH: Thank you. Transcript provided by NPR, Copyright NPR.