Obama Declines Boehner’s Proposal to Increase Rate for People Earning over $1M
House Speaker John Boehner proposed increasing the top rate for people earning more than $1 million. President Barack Obama, who wants higher top rates for people earning more than $250,000, declined the offer. The proposal was a sign that progress has been made in the talks that seemed to have been stalled.
Speaker Boehner is looking into more spending cuts than what President Obama proposed. The speaker asked for a long term increase in eligibility age for Medicare as well as lower cost of living adjustments for Social Security.
If lawmakers and the White House don’t reach an agreement before the year ends, every income tax payer will have to pay at increased tax rates. Budget cuts would also take effect unless the president and Congress manage to stop them along with other deficit reduction measures.
President Obama insisted on extending the present rates for the 98 percent of taxpayers in households that earn less than $250,000. He wants to increase the top two rates from 33 percent to 35 percent and 35 percent to 36 percent for those making above the threshold.
Speaker Boehner said that he opposed raising any tax rates. He wants to raise $800 billion in tax revenue over 10 years by limiting tax loopholes as well as deductions as part of a tax overhaul. But the House Speaker and Republicans in Congress are pressured by the Senate Republicans to accept President Obama’s proposals on tax rates. Instead, they should just press him for more cuts next year in exchange for an increase in the borrowing limit of the US.
President Obama proposed around $600 billion in spending cuts over the next 10 years. This included around $350 billion in Medicare and other health care savings. He also proposed around $200 billion in spending cuts from aid to struggling homeowners, public works projects, and the unemployed.