Boehner says Obama pushing U.S. toward "fiscal cliff"

WASHINGTON Sat Dec 8, 2012 1:17am GMT

U.S. House Speaker John Boehner (R-OH) speaks to the media outside his office on Capitol Hill in Washington, December 7, 2012. REUTERS/Yuri Gripas

U.S. House Speaker John Boehner (R-OH) speaks to the media outside his office on Capitol Hill in Washington, December 7, 2012.

Credit: Reuters/Yuri Gripas

WASHINGTON (Reuters) - Republican House Speaker John Boehner accused President Barack Obama of pushing the country toward the "fiscal cliff" on Friday and of wasting another week without making progress in talks.

With three weeks left before a combination of steep tax hikes and deep spending cuts kicks in unless Congress intervenes, Boehner said the administration had adopted a "my way or the highway" approach and was engaging in reckless talk about going over the cliff.

"This isn't a progress report because there is no progress to report," Boehner told reporters at the Capitol. "The president has adopted a deliberate strategy to slow-walk our economy right to the edge of the fiscal cliff."

The day's rhetoric did point the way to a possible compromise that has been discussed for weeks on the main sticking point, tax hikes for the wealthy.

While Obama wants tax rates raised to 39.6 percent from 35 percent, he has not ruled out a smaller increase, perhaps to 37 percent. On Friday, Boehner, House Minority Leader Nancy Pelosi and Vice President Joe Biden indicated flexibility on the "37 percent solution."

Biden was most explicit, saying that raising the rate was "not a negotiable issue; theoretically we can negotiate how far up."

"There are a lot of things that are possible to put the revenue that the president seeks on the table," Boehner said when asked about the same thing.

Pelosi, questioned later about Boehner's remark, said, "It's not about the rate, it's about the money."

But the bleak report from Boehner prolonged the economic uncertainty surrounding the fiscal cliff, which has already riled markets, slowed down business decisions and disrupted the budgeting processes for government at all levels across the country.

Economists say going over the cliff could throw the economy back into a recession.

Obama has called for extending the tax cuts set to expire on December 31 for middle-class taxpayers, but letting them rise for the wealthiest 2 percent of Americans. Boehner and Republicans oppose his plan, preferring to find new revenues by closing loopholes and reducing deductions.

Boehner characterized as "reckless talk" Treasury Secretary Timothy Geithner's comment this week that the administration was prepared to go over the cliff if tax rates for the wealthiest were not increased.

The downbeat assessment was in line with what Boehner has offered for weeks as the two sides hold their ground on Obama's call for raising tax rates and Republican calls for cuts in entitlements like the Medicare and Medicaid healthcare programs for seniors and the poor.

Congressional aides said there were no plans for meetings on the issue this weekend. Future talks will be limited to Boehner and Obama and their staffs as the deadline approached, aides said.

Boehner said his telephone conversation with Obama on Wednesday and renewed staff talks on Thursday had not made any progress.

'MORE OF THE SAME'

"The phone call was pleasant, but it was just more of the same. Even the conversations the staff had yesterday were just more of the same. It's time for the president, if he's serious, to come back to us with a counteroffer," Boehner said.

Boehner and the House of Representatives leadership submitted their terms for a deal to the White House on Monday, after Obama offered his opening proposal last week.

The plans from both sides would cut deficits by more than $4 trillion over the next 10 years but differ on how to get there. Republicans want more drastic spending cuts in entitlement programs, while Obama wants to raise more revenue with tax increases and to boost some spending to spur the sluggish economy.

With polling showing most Americans would blame Republicans if the country goes off the cliff, more House Republicans have been urging Boehner to get an agreement quickly, even if it means tax hikes for the wealthiest.

But Boehner could have a challenge selling an eventual agreement to conservative Tea Party sympathizers in the House, some of whom are openly critical of the concessions the speaker has already made.

Boehner has been under fire from the right for proposing $800 billion in new revenue and for removing from House committees four conservative Republican lawmakers who were seen as bucking the leadership.

"When he couples this conservative purging with a negotiated tax increase of $800 billion, we are starting to see more and more signs that he's not dedicated to fiscally conservative beliefs," Andrew Roth of the influential anti-tax group Club for Growth told Fox News.

If the question of whether to raise tax rates is resolved, the two sides will then try to figure out a way to deal with the spending cuts, perhaps postponing or trimming them. They will also work toward a longer-term deficit-reduction package to be taken up after the new Congress is sworn in next month.

At a news conference on Friday, Pelosi threw her support behind a White House proposal to give Obama power to raise U.S. borrowing authority without legislation from Congress.

The debt ceiling issue, which provoked a 2011 showdown that led to a downgrade of the U.S. credit rating, has become entwined in the fiscal cliff debate. The debt limit will need to be raised in the next few months.

"The White House and House Democrats are on the same page on the debt ceiling," Pelosi said.

(Additional reporting by Susan Heavey, Rachelle Younglai, David Lawder and Richard Cowan; Writing by John Whitesides; Editing by Eric Beech and Peter Cooney)