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TheStreet Open House

House GOP Focusing On Fiscal Cliff Backup Plan

In the talks to date, Obama is now seeking $1.2 trillion in higher tax revenue, down from the $1.6 trillion he initially sought. He also has softened his demand for higher tax rates on household incomes so they would apply to incomes over $400,000 instead of the $250,000 he cited during his successful campaign for a new term.

He also has offered more than $800 billion in spending cuts over a decade, half of it from Medicare and Medicaid, $200 million farm and other benefit programs, $100 billion from defense and $100 billion from a broad swath of government accounts ranging from parks to transportation and education.

In a key concession to Republicans, the president also has agreed to slow the rise in cost-of-living-increases in Social Security and other benefit programs, at a savings estimated at about $130 billion over a decade.

By contrast, Boehner's most recent offer allowed for $1 trillion in higher taxes over a decade, with higher rates for annual incomes over $1 million. He's also seeking about $1.3 trillion in spending cuts.

The two sides disagree, too, over increases in the government's debt limit, which will soon need to be raised when borrowing reaches the current $16.4 trillion cap.

Also at issue are unemployment benefits, which are scheduled to expire for an estimated 2 million out-of-work Americans at year's end, and the prospect of reduced payments beginning Jan. 1 for doctors who care for Medicare patients.

___

Associated Press writers Andrew Taylor, Jim Kuhnhenn, Andrew Miga and Alan Fram contributed to this report.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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