Business, Economics and Jobs

GOP rejects White House's first fiscal cliff offer


Speaker of the House Rep. John Boehner (R-OH) said he would endorse presidential candidate Mitt Romney on April 17, 2012.


Alex Wong

Republican House of Representatives speaker John Boehner has rejected an opening bid from the White House to avert the looming fiscal cliff. 

Boehner sat down with Treasury Secretary Timothy Geithner on Thursday and rejected an offer including a $1.6 trillion tax increase, a $50 billion economic-stimulus program and new power to raise the federal debt limit without congressional approval, reports the Wall Street Journal.

Boehner called the talks "disappointing" and said he viewed it as a step backward in the negotiations to avoid the fiscal cliff, when the Bush-era tax cuts expire and the first round of trillion dollar spending cuts goes into effect. 

"I'm disappointed in where we are and disappointed in what's happened over the last couple of weeks," Boehner told Reuters after a private session with Geithner at the Capitol.

"No substantive progress has been made in the talks between the White House and the House over the last two weeks," he said. "There's been no serious discussion of spending cuts so far, and unless there is, there's a real danger of going off the fiscal cliff."

The deal offered to Republicans included increasing tax rates on incomes over $250,000, a one-year postponement of harsh spending cuts in defense and domestic programs, and $400 billion in cuts to entitlement programs over 10 years, reports the Wall Street Journal. 

Three Republican congressional aides familiar with the president's offer told USA Today privately that the $4 billion budget package was an "outrageous" proposal that surprised Boehner and was a setback in negotiations to avoid the fiscal cliff. 

The negativity is a quick turnaround from the confidence displayed by both Democrats and Republicans earlier this month after the first meeting between the president and the four top Congressional leaders since the election.

Democratic Senate Majority Leader Harry Reid sounded a very different tone from Boehner. Reid called his private meeting with Geithner "nice" and said that "Democrats are on the same page," reports USA Today.