The deadlock on the fiscal cliff negotiations was broken over the weekend as House Speaker John Boehner gave in on raising taxes on the wealthy.
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The new proposal calls for $1 trillion in new revenues over the next decade as well as $1 trillion in spending cuts.
The program would be comprised of two steps—a small deficit reduction plan to be enacted by the end of the year and a revamp of the tax code and entitlement programs, using a final agreement as a guide.
Boehner also offered to increase the debt ceiling for one year as part of the deal if the amount is matched by cuts in spending.
The proposal could be nixed by conservative Republicans who are opposed to raising taxes in any fashion and there are still wide chasms in the negotiations.
The White House viewed the proposal as a step in the right direction but Democrats felt the debt reduction component was too small and did not extend unemployment benefits due to expire.
Centrists viewed the proposal as the willingness to take a risky move toward compromise by Boehner toward compromise.
The proposal would extend all current tax rates but would increase taxes for those earning annual incomes of $1 million and above. It would close certain loopholes and limit deductions.
The two sides are converging. Last week, President Obama indicated he would accept a lower revenue target--$1.4 trillion, down from $1.6 trillion—and signaled he might be willing to go lower.
Boehner is calling for cuts from entitlement programs such as Medicare. Overall, the proposed cuts may be too steep for Democrats to accept. But the willingness to raise the federal debt limit and avoid another 2011-like scenario could appeal to them.
Although conservatives may create stiff opposition, it appears House Republicans are giving Boehner some room to negotiate