Obama added that the proposals he put forward during the fiscal-cliff negotiations late last year are “still very much on the table.” But the sticking point with Republicans is still there: higher tax revenues. Republican leaders say they’re done with tax hikes, having conceded an increase in the tax rate for the wealthiest Americans from 35 percent to 39.6 percent in the fiscal-cliff deal.
“The deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward, are still on the table,” Obama said, touting “sensible reforms” to Medicare and other entitlement programs, as well as savings in health care.
Republican leaders in Congress were not impressed. The White House had put out advance notice of the president’s proposal, and even before Obama spoke, House Speaker John Boehner rejected it.
“President Obama first proposed the sequester and insisted it become law,” Speaker Boehner said. “Republicans have twice voted to replace these arbitrary cuts with common-sense cuts and reforms that protect our national defense. We believe there is a better way to reduce the deficit, but Americans do not support sacrificing real spending cuts for more tax hikes.”
The idea for the sequester did originate with the White House during the 2011 debt-ceiling crisis, according to Bob Woodward’s latest book, “The Price of Politics,” but the deep spending cuts were never intended to go into effect. The sequester was meant to hang over deficit reduction talks like an anvil – something that would be so painful that it would never be allowed to fall.
Instead, the sequester’s $1.2 trillion in spending cuts over 10 years – half from defense spending, half from nondefense discretionary spending – has become part of a series of “fiscal mini-cliffs” that threaten to dog Obama’s second term, if agreement on long-term deficit reduction can’t be reached. With divided government and politics highly polarized, optimism is in short supply.