Grand bargain shrinks as Congress nears U.S. budget deadline

Initial Parries

The president initially sought $1.6 trillion in new revenue, including a return to pre-Bush income tax rates for annual household income over $250,000 a year. The speaker first rejected any increase in tax rates, instead offering $800 billion in revenue by limiting unspecified exemptions.

After Boehner proposed raising taxes for households earning more than $1 million a year, Obama countered with a proposal to raise taxes on more than $400,000 of income.

Obama also has agreed to accept cuts in entitlement spending on programs such as Medicare, while Boehner has maintained that new taxes and spending cuts must be balanced on a one-to-one basis.

In sum, the two have approached the outlines of a plan that would raise about $1 trillion in tax revenue and cut about $1 trillion in spending.

Republicans are “not going to get what we think is right” because they don’t control the government and will need to compromise to avoid the cliff, Hutchison said Dec. 24 on MSNBC.

Everyone is “going back to the drawing board,” the Texas senator said. “It’s going to take everyone” to reach a deal.

Bloomberg News

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