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.
"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.
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