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Obama's day: Wrangling over the fiscal cliff

9:22 AM, Dec 18, 2012   |    comments
Barack Obama, as US President, and John Boehner, as US Representative of Ohio and House Speaker/AP
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It looks like another day of back-and-forth Tuesday between President Obama and House Speaker John Boehner over the fiscal cliff.

Boehner meets with House Republicans to discuss Obama's latest offer, amid remaining -- but narrowing -- differences over tax rates and spending cuts.

Aides to Boehner said the president's latest offer features $1.3 trillion in tax revenues and $930 billion in spending cuts; the Republicans want a one-to-one ratio.

"We hope to continue discussions with the President so we can reach an agreement that is truly balanced and begins to solve our spending problem," said Boehner spokesman Brendan Buck.

Sources familiar with the talks describe the White House plan differently, saying it includes $1.2 trillion in new tax revenues and $1.22 trillion in spending reductions. The latter includes revisions in the way Social Security cost-of-living increases are calculated.

Both parties are trying to get a debt reduction deal before the end-of-the-year deadline for the fiscal cliff, a series of automatic tax hikes and budget cuts that are currently set to take effect.

Any agreement must get through both the House and the Senate, and that may not be easy. Sen. Bob Corker, a Republican from Tennessee, told CNBC on Tuesday morning that "I'm really surprised by the reporting this morning ... We're not close to a deal."

The new Obama plan also calls for higher tax rates on Americans who make more than $400,000 a year, which is a change. The president had once called for higher tax rates over $250,000 annually.

Boehner, who once opposed any increase in the tax rate, has now offered increasing only the top tax rate, affecting Americans who make over $1 million.

The reported White House plan calls for $1.2 trillion in new tax revenue. Boehner's number, which includes ending certain tax loopholes and tax deductions, is closer to $1 trillion.

White House officials haven't discussed the details of the talks, but say they are hopeful of a deal.

"The President believes that the parameters of a potential agreement are clear," said White House spokesman Jay Carney. "He believes that a deal is possible."

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