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Boehner: 'No substantial progress' in 'fiscal cliff' talks

By Lori Montgomery, Paul Kane and Rosalind S. Helderman
The Washington Post

House Speaker John A. Boehner delivered a blow Thursday to the optimism that Washington leaders have been showing over negotiations on the fiscal cliff, saying that there’s been “no substantive progress” in attempts to reach a deal and that “the White House has to get serious” on entitlement spending.

At a press conference after meeting with Treasury Secretary Timothy F. Geithner and White House legislative affairs chief Rob Nabors, Boehner said that the meeting and a call with President Obama on Wednesday evening left him believing Democrats are not willing to rein in spending on entitlements as part of the deal.

“The White House has to get serious,” he told reporters, adding, “We have no idea what the White House has been willing to do.”

Boehner called the meeting and phone call “frank and direct” but added that “no substantive progress has been made” to avert the automatic spending cuts and tax hikes set to take effect Jan. 1.

Financial markets, which have been betting that a deal was at hand in recent days, began a downward dive as Boehner spoke.

The White House sent Geithner and Nabors to Capitol Hill on Thursday for a day of talks with congressional leaders, marking the first high-level meetings on the fiscal cliff in nearly two weeks. The pair met with Boehner (R-Ohio) and other top House Republicans in the morning.

The speaker’s prepared remarks contrasted sharply with the comments of the past three weeks, during which he and Obama tried to appear optimistic. “His actions have not matched his public comments,” Boehner said.

Negotiations had bogged down on Wednesday with a dispute over how to tackle the soaring cost of federal retirement programs emerging as the latest roadblock to progress.

Democrats complained that Republicans have yet to name their price for enacting legislation that would preserve tax cuts for the vast majority of Americans next year while raising revenue from the wealthiest 2 percent.

Republicans, meanwhile, insisted that it is up to the president to offer a plan to restrain the cost of Medicare, Medicaid and Social Security — the government’s biggest and fastest-growing programs — in exchange for GOP concessions on taxes.

The meeting with Boehner also included Majority Leader Eric Cantor (Va.), Ways and Means Chairman Dave Camp (Mich.) and budget chief Paul Ryan (Wis.). Ryan, fresh off the campaign trail as Republican presidential candidate Mitt Romney’s running mate, has agreed to help Boehner vet ideas and round up GOP support for an eventual deal.

Geithner and Nabors will also meet with Senate Minority Leader Mitch McConnell (R-Ky.), as well as Senate Majority Leader Harry M. Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.).

On Wednesday, aides to Boehner encouraged Geithner and Nabors to arrive with a detailed proposal to rein in health-care and retirement spending. Officials said Boehner spoke with Obama by telephone on Wednesday, but they did not give details.

“We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts — because spending cuts that Washington Democrats will accept is what is missing from the balanced approach that the president says he wants,” Boehner spokesman Michael Steel said.

Geithner and Nabors will also meet with Senate Minority Leader Mitch McConnell (R-Ky.), as well as Senate Majority Leader Harry M. Reid (D-Nev.) and Pelosi.

On Wednesday, aides to Boehner encouraged Geithner and Nabors to arrive with a detailed proposal to rein in health-care and retirement spending. Officials said Boehner spoke with Obama by telephone on Wednesday, but they did not give details.

“We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts — because spending cuts that Washington Democrats will accept is what is missing from the balanced approach that the president says he wants,” Boehner spokesman Michael Steel said.

White House press secretary Jay Carney told reporters Wednesday that Obama has already offered a plan to slice $340 billion from federal health programs, in part by charging wealthy seniors more for Medicare, and that he is open to additional proposals for health-care savings.

But top Democrats, including Reid and Senate Majority Whip Richard J. Durbin (Ill.), have resisted changes to entitlement programs as part of the fiscal-cliff negotiations. With few signs of progress and barely four weeks remaining until more than $500 billion in automatic tax increases and spending cuts are set to take effect, a sense of gloom was descending over the Capitol.

Erskine Bowles, a former Democratic White House chief of staff who has returned to Washington this week to act as an informal envoy between Republicans and the White House, said he sees only a one in three chance of an agreement before the fiscal cliff hits in January — in part because of Democratic recalcitrance over entitlement savings.

“Am I an optimist? No, but I am hopeful,” Bowles told reporters after emerging from a meeting at the Capitol with Boehner and other House Republican leaders Wednesday.

“I think it’s at most a one-third probability we’ll get something done before the end” of the year, he said earlier at a breakfast with reporters hosted by the Christian Science Monitor. “There has been no serious discussion yet about entitlement reform.”

Bowles met Tuesday with Obama and other top administration officials, who told him that they are willing to show “flexibility” on another key difference between the two sides: where to set tax rates for the wealthy in 2013.

Republicans have insisted that the George W. Bush-era rates be extended for all taxpayers, a move that would maintain the top tax rate at 35 percent. Democrats, including Obama, have called for the Bush rates for the wealthy to expire, a move that would send the top rate to 39.6 percent and raise about $850 billion in revenue over the next decade.

In a news conference two weeks ago, Obama suggested that he was open to setting the top rate somewhat lower than 39.6 percent; some Democrats have suggested a rate as low as 37 percent. Obama expressed that openness more directly this week, Bowles said, saying some of the $800 billion could come from limiting deductions and other tax breaks, as Republicans prefer.

The White House believes “that the only way you can make it real is to have it come in the form of higher rates. But it all doesn’t have to come out in the form of higher rates. Some of it can come in the form of deductions and credits,” Bowles said. “I heard it not only from the team but from the president.”

At the Capitol, Boehner was firm in his insistence that Republicans would not compromise on tax rates. During a closed-door meeting of House Republicans on Tuesday morning, Boehner brushed aside a suggestion from Rep. Tom Cole (Okla.) that Republicans acquiesce to Democratic demands to pass legislation that would extend the Bush tax cuts only for income under $250,000 a year.

Cole, a close Boehner ally, told his colleagues that maintaining rates for the vast majority of Americans would be the smart political move. But no other Republican spoke in favor of that position, according to those present. And Boehner later told reporters that he thinks Cole’s position is wrong.

“We’re willing to put revenue on the table as long as we’re not raising rates,” Boehner said.

Obama, meanwhile, expressed optimism Wednesday about the odds of a deal coming together. Speaking at the Eisenhower Executive Office Building, he urged voters to pressure Congress to freeze tax rates for the middle class, warning that congressional inaction could cost the average family more than $2,000 next year.

“When the American people speak loudly enough, lo and behold, Congress listens,” Obama said, introducing a Twitter hashtag, #My2K, for venting complaints. “My hope is to get this done before Christmas.”

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Staff writer Ed O’Keefe contributed to this report.


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