On Fri., Nov. 16, congressional leaders will head to the White House to meet with President Obama to find common ground on how to avoid the fiscal cliff. Democrats have made it clear that House Speaker John Boehner's (R-Ohio) offer to accept increased federal revenue by limiting loopholes and deductions is a non-starter.
Speaker Boehner said Republicans will not accept an increase in tax rates, but instead seek serious reforms to entitlement programs, mainly Medicare and Medicaid. That position is unchanged from the one Boehner advocated for during last year's negotiations over raising the debt ceiling. Many in Washington believe the Democrats' current position is aimed at trying to push the starting point for this year's talk's further to the left than where they ended last year, and Democrats now insist that last year's offer has expired. Democrats are seeking $1.6 trillion in new revenue which is double the amount on the table during last year's debt ceiling debate.
President Obama is in lockstep with the tough line coming from Senate Democrats by insisting on increasing the tax rates of the wealthy, even if it means going over the fiscal cliff - the combination of automatic tax increases and spending cuts that take effect starting on January 2. Economists have warned plunging over the fiscal cliff could push the country back into recession.
Utah Republican Senator Orin Hatch said Nov. 14 he is very concerned about both political parties digging in to their positions on how to address the fiscal cliff, rather than showing signs of coming together. Senate Finance Committee Chairman Max Baucus (D-Mont.) has praised Obama's fiscal cliff remarks saying he did not believe that extending the tax cuts for those with incomes of $250,000 and less should serve as a "starting point." While Obama said the cuts could be passed next week, Baucus said, "no, because the math doesn't add up." It was unclear whether he was simply saying the cuts should be part of a broader deal.