Representative Jeff Flake, an Arizona Republican, said, “All of us recognize the top rate is going to go up.” Asked if there was dissent during the meeting, Flake said there was a lot of discussion.
A deal about halfway between the most recent offers could include $1 trillion each in tax increases and spending cuts and allow tax rates for top earners to rise in 2013.
In exchange, Obama would accept some up-front spending cuts, and other scheduled cuts would be canceled. Congress would pursue broader changes next year against the threat of tax increases and spending cuts in 2014.
The Standard & Poor’s 500 Index added 0.2 percent to 1,432.92 at 9:44 a.m. in New York. The benchmark index has gained 14 percent so far this year. The Dow Jones Industrial Average advanced 18.43 points, or 0.1 percent, to 13,253.82 today. The benchmark 10-year Treasury bond yield was little changed at 1.78 percent at 9:06 a.m. New York time, according to Bloomberg Bond Trader prices.
Obama and Boehner are talking about policy changes they would rather avoid. Boehner agreed last week to accept higher tax rates on annual household income above $1 million. Obama moved off the $250,000 threshold he has used for five years and offered to change the cost-of-living calculation for Social Security.
If Obama and Boehner reach a deal, it will take days to draft legislation, sell it to lawmakers and pass it. Senate Majority Leader Harry Reid, a Nevada Democrat, said senators would probably convene Dec. 26 to consider budget measures.
Boehner and Obama each have political challenges as they try to wrap up a deal.
Boehner must secure enough savings from entitlement programs to placate Republicans, who are demanding a high price for reversing their opposition to increased tax revenue.
Conversely, Obama must get enough tax concessions from Boehner to satisfy Democrats who say that the president would get the tax rate increases he wants by waiting until Jan. 1. That’s when the tax cuts expire and Obama could pressure Congress to cut rates on income of individuals below $200,000 and married couples below $250,000.