As we move into the last two weeks of the calendar year – and come ever closer to the edge of the “fiscal cliff” – House Speaker Boehner (R-OH) has offered to allow a tax increase on millionaires, which is a significant shift toward President Obama’s position on raising tax rates for the wealthy. But is comes with a caveat: Boehner would only agree to this if Democrats agree to significant spending cuts, including to entitlement programs. In exchange for higher tax rates for annual income of more than $1 million, the GOP offer would raise the eligibility age for Medicare benefits from the current 65 to 67 and require $1 trillion in new spending cuts.
The GOP appears to be moving closer to President Obama’s position on tax rates, but the Speaker’s offer is still nowhere close to what the President or Democratic leaders on Capitol Hill can ultimately accept. The two sides also remain far apart on the extent and source of cuts to entitlement programs. No new talks have yet been announced for this week, but both sides say the lines of communication between the Administration and Capitol Hill Republicans remain open.