FOXNews.com: Obama, Dems betting GOP will blink

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Obama, Dems betting GOP will blink Nov 30th 2012, 14:07 President Obama is once again heading out Friday on the tax-hike campaign trail as top Democratic lawmakers appear willing to play chicken with Republicans on the looming fiscal crisis, refusing to budge on their insistence that high earners pay more in taxes and betting Republicans will blink before massive spending cuts and across-the-board tax increases kick in. With just one month left before the fiscal poison pill Congress put in place a year ago as an incentive to reach a deal kicks in, Republican insiders complain that the other side's intransigence seems calculated to make them blink. After signaling that they would be open to closing tax loopholes – and possibly raising taxes on families making above $250,000 – Republicans say Democrats have countered with calls for more stimulus, a package of additional spending and permanently raising the borrowing limit, while postponing talks about reforming entitlements or cutting spending. "Even as an opening bid, this offer would be ludicrous." - Republican insider familiar with fiscal talks "The spending cuts they are offering (which come later) are wiped out by all the new goodies [Obama] is also requesting," a Republican insider told Fox News. If the two sides can't come together, tax rates will go up for all brackets, hitting all of the half of Americans who pay federal income tax. Polls have suggested that if that happens, a majority of Americans will lay the blame on the GOP and President Obama has been engaging in a campaign-style effort to portray Republicans as willing to let everyone's taxes go up in a bid to protect the rich. On Thursday, a frustrated House Speaker John Boehner left a meeting with Treasury Secretary Timothy Geithner and said President Obama's money man offered no "specific" plan for averting the looming end-of-year fiscal crisis. "First, despite the claims that the president supports a balanced approach, Democrats have yet to get serious about real spending cuts," the Ohio Republican said. "And secondly, no substantive progress has been made in the talks between the White House and the House over the last two weeks." The sessions were seen as an important step in determining how the government will avoid a year-end package of tax increases and spending cuts that could throw the economy into recession. Both Senate Majority Leader Harry Reid and the White House, through spokesman Jay Carney, dismissed Republican demands that any increases in the debt limit be offset with spending cuts. Obama's tax plan calls for an extension of the existing tax rates for most Americans – individuals earning $200,000 or more and couples earning $250,000 and up -- while allowing for tax rates to increase for the wealthiest 2 percent. Republicans have been divided on whether to go along with that, but even those who may be willing, notably Oklahoma Rep. Tom Cole, want deep spending cuts in return. The White House and Congress are trying to reach a deal before Jan. 1 – when all of the Bush-era tax cuts are set to expire and huge reductions to the federal budget kick in automatically. Those spending cuts are part of a default agreement by Congress after it failed to reach a more measured deal to reduce the trillion-dollar annual deficits that have brought the national debt to more than $16 trillion. The mix of tax increases and budget cuts will equal roughly $100 billion alone next year and about $1.2 trillion over the next 10 years should Congress and the White House fail to reach a deal. Some economists say that could plunge the economy into a recession. In addition to raising rates on high-income earners, the current Democrat proposal includes raising taxes on capital gains and dividends, extending the payroll tax holiday, raising estate taxes and another $600 billion in new spending, according to those familiar with talks. Democrats are pushing for new stimulus spending, including $50 billion for 2013, and raising the debt ceiling for good. Republicans say Democrat plans to reform Medicare in the future to shave off $400 billion, would be more than offset by the new spending, which also includes extending unemployment insurance and refinancing underwater mortgages. A senior Republican familiar with negotiations dismissed the idea that the Democrats are simply playing hardball with their opening offer. "Even as an opening bid, this offer would be ludicrous," he said. "But we're way past that. We had about seven weeks to resolve this. Three of those weeks are gone, and this is what he comes with?"

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