President Barack Obama has responded to House Speaker John Boehner’s gesture last week towards reaching a deal to avoid the Jan. 1 “fiscal cliff” of tax hikes and spending cuts, putting a specific demand on the table: $1.6 trillion in new tax revenues, reached by raising tax rates on the wealthy in addition to other “tax revenues.” The offer is twice as high as a deal Obama scuttled last year, suggesting he may be prepared to let talks fail again.
Last week, Boehner proposed raising “revenues,” but not “rates”–the same position he took during negotiations on raising the debt ceiling in the summer of 2011. Then, Boehner had agreed on raising revenues by $800 billion–all without raising tax rates. The White House had been prepared to agree on the deal, until President Obama decided to demand an additional $400 billion from increased tax rates, destroying the “grand bargain.”
The day after the 2012 election, Boehner essentially repeated his principles for a deal, without offering a specific number. In a stage-managed speech in the East Room of the White House, complete with a standing ovation by and a multicultural tableau of staffers behind the President, Obama welcomed the gesture and repeated the word “revenues” without mentioning “rates,” suggesting that he might be prepared to accept Boehner’s terms quickly.