President Barack Obama’s top economic adviser challenged Republican congressional leaders to put an offer on the table in fiscal-cliff talks and defended Obama’s debt-reduction proposals as concrete and detailed.
Gene Sperling, director of the White House National Economic Council, laid out markers for the negotiations in an interview on Bloomberg Television, saying the president would insist on tax-rate increases for the wealthy, a long-term extension in the legal debt limit, and maintenance of some stimulus measures to support the economy.
Sperling, 53, one of the administration’s principal negotiators, signaled flexibility on how high tax rates would go and the composition of continued stimulus.
“It’s for them now to come forward with their plan, with their details, so that we can start working quickly to getting an agreement,” Sperling said on “Political Capital with Al Hunt,” which airs this weekend.
Obama and congressional Republicans are deadlocked as the year-end deadline approaches for the so-called fiscal cliff -- more than $600 billion in spending cuts and tax increases that will be triggered unless Congress acts.
Treasury Secretary Timothy Geithner shuttled among congressional leaders Nov. 29 with a plan to trade $400 billion in cuts to entitlement programs for $1.6 trillion in tax increases, primarily targeting families with more than $250,000 in annual income.
Obama warned of “prolonged negotiations” in an appearance yesterday at a toy factory in Hatfield, Pennsylvania. Republican House Speaker John Boehner declared the talks at a “stalemate,” saying the president hasn’t made a serious proposal for compromise.
Sperling said Obama has offered “very specific savings that have been detailed in our budget.” Obama’s budget proposal calls for “$600 billion in entitlement savings,” which includes “about $350 billion in health entitlement savings, such as in Medicare,” he said.
The president “has made clear” that “you’re going to have rates go up on the most high-income, most fortunate Americans,” and that “the era of threatening defaults is over,” Sperling said.
Business leaders won’t have the confidence to invest money if they “think that every three to six months we’re going to go through this debacle, this ritual of people threatening the default of the United States as a way to get their way in a budget agreement,” Sperling said.
After partisan disputes dragged out negotiations over raising the debt limit last year, Standard & Poor’s lowered the U.S.’s credit rating to AA+ from AAA on Aug. 5, 2011. The rating firm said the deadlock showed the government was becoming “less stable, less effective and less predictable.”
Sperling said the administration has advanced proposals to maintain economic stimulus into next year through infrastructure spending, an extension of expiring payroll tax cuts and continuation of extended unemployment benefits.
“Those type of measures need to be part of” a deal, he said.
Asked if Obama would agree to a deal that didn’t return the income-tax rate for top earners to the full 39.6 percent rate in effect before President George W. Bush’s tax cuts, Sperling suggested the flexibility on the issue by saying “there’s no way he’s extending rates at the current Bush level” of 35 percent.
Boehner, an Ohio Republican, said letting tax rates increase for top earners would boost taxes on some small businesses.
“Raising taxes on small businesses instead of taking a balanced approach that also cuts spending is wrong,” he said. “It’s only going to make it harder for our economy to grow.”
Erskine Bowles, a co-chairman of Obama’s 2010 deficit- reduction commission, said this week that based on a meeting with the president on Nov. 27, he believed there’s some “flexibility” in Obama’s position on tax rates for the wealthiest Americans.
Bowles, who isn’t part of the current negotiations, expressed skepticism that Obama and the Republicans would reach a deal by year’s end to avert the fiscal cliff.
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