CNN sources: Fiscal cliff talks centered on GOP $2 trillion proposal
CNN Senior Congressional Producer Deirdre Walsh and CNN Senior Congressional Correspondent Dana Bash
Washington (CNN) – President Obama and House Speaker Boehner are discussing a $2 trillion framework on a deal to avert the fiscal cliff, that would include roughly a trillion in tax increases and roughly a trillion in savings from entitlement programs, multiple sources familiar with the talks tell CNN.
Boehner and the president met in person on Monday, but sources familiar with the talks indicate that the framework under discussion is what Republicans are pushing to get to agreement, but it's unclear whether the make up of the $2 trillion framework could get support from Democrats.
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Democratic sources tell CNN part of the issue now is that the trillion in spending cuts comes from some changes to entitlement programs such as reforms to Medicare – along with a discussion of raising the eligibility age. These Democratic sources say it is unclear if those Medicare changes could pass the House or Senate, because they may be too deep for many Democrats.
Pushing the talks to a new stage, Speaker Boehner relented over the weekend on his opposition to any tax rate increases, and proposed that tax rates be allowed to go up on those making a million or more per year. In addition to new revenue from the wealthy, Boehner is also proposing closing some tax loopholes and limiting some deductions. As he has in previous offers, the speaker is also pushing for the White House to agree to change the way inflation is adjusted for federal benefits like Social Security.
The plan under discussion now also includes an increase in the debt limit for some period of time – potentially a year. But an aide to Boehner notes that this part of the agreement is contingent on the size of the spending cuts – the speaker remains committed to his rule that the cuts and reforms have to be greater than any increase in the debt ceiling.
Another key outstanding issue is the kind of tax revenue they could agree to. Boehner's weekend offer of rate increases for the wealthiest Americans proposed increases for families making a million dollars or more a year. But the president campaigned on raising tax rates for families making more than $250 thousand a year, so the White House rejected that offer. Still – the fact that the House speaker offered any increase in tax rates, which he and most Republicans oppose, was greeted as progress at the White House, according to Democratic sources.
All sides caution this is still highly fluid, and even the overall $2 trillion framework could change.