Traverse City Record-Eagle

Business

December 18, 2012

Dems signal Obama flexibility on fiscal cliff

President, Boehner meet for 45 minutes

WASHINGTON (AP) — Republican House Speaker John Boehner is offering to let taxes rise on wealthy Americans' investment income and dividends as part of a deal to avert the "fiscal cliff," officials said Monday amid signs that President Barack Obama is ready to make a key concession of his own in urgent, high-level negotiations.

On a day the two men met for about 45 minutes at the White House, officials said they detected a receptiveness by the administration side to proposals to slow the growth of annual cost-of-living benefits paid to recipients of Social Security and other government retirement programs.

If so, it would show Obama's willingness to move toward Boehner in the secretive talks that are unfolding against a year-end deadline. Without legislation to the contrary, tax rates will rise for nearly all wage earners and spending cuts will begin at the Pentagon and in domestic programs across government.

Economists inside and outside the government have warned that the combination of the two could send the economy into recession.

Other major issues are part of the negotiations. Without action by Congress, for example, long-term unemployment benefits will expire for millions at the end of the year, and doctors will face a cut in the payments they receive for treating Medicare patients.

Democrat Obama has also called for assistance for hard-pressed homeowners as well as fresh economist stimulus measures, and some Democrats want to include a sizeable amount of disaster aid in any legislation to offset the cost of Superstorm Sandy.

Officials who disclosed developments in the cliff talks insisted on anonymity because they were not authorized to publicly describe the secret negotiations.

At the White House, spokesman Jay Carney sidestepped when asked about curbing cost-of-living increases for benefit programs.

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