By Lisa Mascaro and Christi Parsons, Tribune Washington Bureau –
WASHINGTON — Once-upbeat talks over the nation’s year-end budget crisis stalled Thursday as Republicans rejected the latest White House offer and emboldened Democrats held firm on President Barack Obama’s insistence that wealthier Americans must pay more taxes.
House Speaker John A. Boehner, R-Ohio, struck a gloomy note after speaking by phone with Obama late Wednesday — a conversation described as “curt” by one source — and meeting Thursday morning with Treasury Secretary Timothy Geithner in the Capitol.
Geithner presented the White House’s latest offer, similar to its opening bid: $1.6 trillion in new revenues over a decade, largely from tax increases on the wealthy, as well as spending cuts the president had previously proposed.
The White House also wants $50 billion in new stimulus spending, aid to help homeowners refinance mortgages, $30 billion in extended unemployment benefits and a new process to make it easier to raise the federal debt limit debt, which must increase in a matter of months to prevent a default.
“I’m disappointed in where we are,” Boehner said.
Four weeks remain before the nation hurtles off the $500 billion “fiscal cliff” of tax hikes and spending cuts, which experts warn could cause another recession. Tax rates in place for a decade are set to rise on Dec. 31; days later, massive spending cuts will begin to slice the federal government.
Neither political party has budged from its starting position. Top Republicans also have refused Obama’s call to pass a bill that would prevent a tax hike on 98 percent of households while talks continue.
As Obama prepares to take his proposal on the road Friday, Democrats are increasingly buoyed, believing they hold a stronger hand. “Look, we don’t expect the Republicans to be enthusiastic and start cheerleading about a deal that includes higher rates on the wealthiest Americans,” said Sen. Charles Schumer of New York, the No. 3 Democrat. “But they see the handwriting on the wall.”
With Republicans wary of being blamed for a New Year’s tax hike of $2,200 on average Americans if no deal is struck, Obama has tapped his vast campaign infrastructure to pressure the GOP.
On a shopping trip to the grand opening of Washington’s first Costco, Vice President Joe Biden suggested the tax breaks for average Americans are needed to maintain consumer confidence.
“Consumer confidence is growing; the last thing we need to do is dash that,” Biden said in between sampling snacks and shopping for holiday gifts.
Obama and Boehner spoke late Wednesday before high-level talks resumed for the first time since top congressional leaders met at the White House immediately after the election.
“It was frank and direct and a good conversation,” said White House spokesman Jay Carney. The call lasted 28 minutes, one White House official said.
Boehner characterized the president as “direct and straightforward.”
Republicans are increasingly frustrated that Democrats have declined to outline specific cuts to Medicare, Medicaid and other government programs in exchange for Boehner’s willingness to consider new revenue sources.
Boehner laid the blame for the stalemate on Obama and his allies on Capitol Hill. “Listen, this is not a game. Jobs are on the line. The American economy is on the line,” Boehner said. “The White House has to get serious.”
