House of Representatives Speaker John Boehner’s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end “fiscal cliff.”
The question now boils down to price – which income levels, what rates and what’s offered in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no surge toward an agreement is immminent.
With just over two weeks before the fiscal cliff’s $600 billion in automatic tax hikes and spending cuts are triggered, threatening a new recession, there is little time to craft a comprehensive deal that will satisfy both Democrats and Republicans.
Until the latest offer, made on Friday, Boehner had insisted on extending all of the Bush era tax rates, resisting President Obama’s demand to let the marginal rates rise on income above $250,000. A rising chorus of business executives also had urged Republicans to agree to this.
Although the White House has not accepted Boehner’s gambit, which media reports have said includes a $1 million tax-hike threshold, it could push negotiations away from entrenched, ideological positions.