Fiscal cliff: Partisan differences narrow in negotiations over US budget

Republican Speaker and White House offer concessions as deadline for automatic cuts nears

Negotiations between the White House and Republicans over a complex package of measures to start narrowing the giant gap between what America spends every year and what it collects in taxes appeared yesterday to have accelerated with both sides offering concessions.

Obstacles still remain and even if the Republican Speaker of the House, John Boehner, indeed hammers out a compromise plan with President Barack Obama as early as this week he will still struggle to persuade some members of his own party to vote for it. Some on his right flank, including those from Tea Party, will struggle to swallow the pill if, as now seems certain, it includes some tax increases for the rich.

Much is at stake because a failure to reach a deal by 1 January will mean the automatic triggering of an array of painful austerity measures including quite significant tax increases for almost every working American and a raft of painful cuts in spending. The chilling effect could be enough to knock the US back into recession.

Mr Boehner told members of his party in a private meeting that he would prepare a back-up bill with cuts and higher taxes for families earning over $1m just in case the talks fall apart. But clearly he hopes that won't be needed. "I continue to have hope that we can reach a broader agreement with the White House," he told reporters.

The ice broke last Friday when Mr Boehner for the first time offered some degree of tax-rate increases on the rich. He made the offer quietly while the country was focused on the school shooting in Connecticut. There is also some indication that the tragedy has meant a softening of partisan belligerence in Washington.

"Americans don't need more stress at this time," Mr Boehner said last night when asked why things had suddenly started to move forward.

The distance each must travel to reach a deal is now relatively small. Essentially, Mr Boehner wants a balance between $1trn in spending cuts and $1trn in new revenues over 10 years. Mr Obama wants slightly less pain on the spending side and more meat on the revenue side.

He has already agreed, however, that tax rises should apply only to families earning $400,000 or over, not the $250,000 threshold he had originally proposed.

Mr Obama has also dropped a demand that a final package gives him permanent authority to raise the country's borrowing limit – the debt ceiling – as and when necessary.

It was a fight over raising the debt ceiling last year that damaged the US credit rating and led to the litany of almost indiscriminate spending cuts that will start to come in effect on 1 January if a deal is not done. Mr Obama is instead asking for debt ceiling authority only for two years.

$1trn

Amount Boehner wants in spending cuts and new revenues over 10 years

News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
premier league
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
people'I hated him during those times'
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
Dame Vivienne Westwood has been raging pretty much all of her life
peopleMemoir extracts show iconic designer 'felt pressured' into going out with Sex Pistols manager
Life and Style
fashionAlexander Fury's Spring/Summer 2015 London Fashion Week roundup
Arts and Entertainment
Lauryn Hill performing at the O2 Brixton Academy last night
musicSinger was more than 90 minutes late on stage in Brixton show
News
i100
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
News
people''Women's rights is too often synonymous with man-hating'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Head of Marketing and Communications - London - up to £80,000

£70000 - £80000 per annum: Ashdown Group: Group Head of Marketing and Communic...

Nursery Nurse

Negotiable: Randstad Education Manchester: Level 3 Nursery Nurse required for ...

Nursery Nurse

Negotiable: Randstad Education Manchester: L3 Nursery Nurses urgently required...

SEN Teaching Assistant

Negotiable: Randstad Education Manchester: We have a number of schools based S...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam