Inching Closer To A "Fiscal Cliff" Deal?

By: CBS/AP (Posted by Kion Hudson)
By: CBS/AP (Posted by Kion Hudson)

(CBS/AP)-- Publicly, it sounded like the White House and House Republicans had gotten nowhere by Tuesday night.

In the most recent trade of proposals between President Obama and House Speaker John Boehner, the White House sent its offer to the Capitol Monday and Republicans counter-offered Tuesday, after which Mr. Obama and Boehner spoke by telephone, though no details were provided.

The latest offer from the White House included $1.4 trillion in new revenue, down from its initial request of $1.6 trillion, but still $600 billion more than the $800 billion number Republicans are aiming for.

One senior GOP House source told CBS News that the $1.4 trillion offer is no more acceptable than the White House's first offer, casting it as laughable.

And earlier in the day, after the White House made its latest offer and before Boehner sent his most recent counter-proposal, he took to the House floor to call out the White House for "slow walking" the negotiations.

But, despite the public posturing, the fact that very little has leaked about the private conversations between the president and Boehner is a signal that there may be real movement behind the scenes.

Publicly, however, the only news out of the latest round of negotiations is the lowering of the White House's tax revenue request and, as the Wall Street Journal reports, the news that another part of the tax code is on the table:

The White House has told Republicans it would include an overhaul of the corporate-tax code as part of any deal to reduce the deficit, people familiar with the talks said, putting a major priority for business groups on the table as part of the intensifying negotiations.

Corporate taxes hadn't until now been part of budget talks aimed at averting spending cuts and tax increases set for January. Much of the focus has instead been on the expiring individual income-tax cuts, not corporate rates. ...

As part of its budget proposal, the White House lowered its target for new tax revenue to $1.4 trillion, down from Mr. Obama's initial offer of $1.6 trillion, officials said.

It also included new stimulus spending, an increase in the U.S.'s borrowing limit and a commitment to overhaul the corporate tax code in 2013, though no details were immediately available.

Meanwhile, the New York Times points out, even if Mr. Obama and Boehner clear the hurdle of coming to an agreement on how to avert the "fiscal cliff", the next hugely significant challenge will be for Boehner to get his fellow House Republicans to vote for it:

With negotiations quickening on Tuesday to prevent a year-end fiscal crisis, White House officials once again are confronting a vexing question: Can Speaker John A. Boehner deliver enough Republican votes for whatever deficit-reduction plan he and President Obama might decide?

Eighteen months ago the White House was forced to answer in the negative after secret negotiations between the two leaders collapsed once word leaked of their tentative deal, with its proposed revenue increases.

But once again, Mr. Obama must put his fate in Mr. Boehner's hands on the issue that will help define the president's second term, and his legacy.

If a deal is struck and Mr. Obama and Congress avert the "fiscal cliff" before January 1, there's still more for them to worry about early next year, the Associated Press reports:

While White House and Republican congressional leaders labor behind closed doors to cut a deal to steer clear of the first cliff - mandatory tax increases and spending cuts due to hit in early January - another treacherous economic precipice looms.

It's when the government will again bump up against the congressionally-set debt ceiling. ...

The current statutory limit on the government's borrowing authority of $16.4 trillion will technically be reached in late December, but likely can be put off until mid-February through accounting maneuvers.

Obama has asked Congress for authority to raise the debt limit without prior approval. But Republicans seem unlikely to give up that bargaining chip.

Back to the imminent issue at hand, the "fiscal cliff", the president told ABC News that he's still optimistic that a deal will get done, adding that while a deal is reachable, "time is running short."


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