House Speaker John Boehner (R-Ohio) has offered to take the debt ceiling off the table for one year, the Washington Post and CBS News reported Sunday, marking a breakthrough in the speaker's fiscal cliff negotiations with President Obama.
According to the Post, Boehner made the offer to Obama on Friday as part of an ongoing discussion of how to avert the potentially calamitous effects of drastic spending cuts and tax hikes set to kick in on January 1. Previously, many Republicans have argued that the debt ceiling gives the GOP leverage to negotiate spending cuts with Obama and congressional Democrats.
The debt ceiling is currently capped at $16.4 trillion, the rate established during last year's showdown. The U.S. is expected to hit that limit by early February, posing the threat of government shutdown and another congressional battle. President Obama has requested the authority to raise the debt ceiling in such an occasion, an idea Republicans have largely rejected.
"Congress is never going to give up our ability to control the purse," Boehner said last week. "And the fact is, is that the debt limit ought to be used to bring fiscal sanity to Washington."
Other details of Boehner's latest offer emerged Saturday, including a proposal to raise taxes for those earning more than $1 million. While the White House did not accept Boehner's offer, remaining firm that any deal must include increased rates for the top two percent of earners, the proposal signals progress in negotiations that have otherwise appeared stalled.
The Associated Press reports:
House Speaker John Boehner is offering $1 trillion in higher tax revenue over 10 years and an increase in the top tax rate on people making more than $1 million a year. He's also offering a large enough extension in the government's borrowing cap to fund the government for one year before the issue must be revisited – conditioned on Obama agreeing to the $1 trillion in cuts.
The offer, made Friday after a long impasse between Boehner, R-Ohio, and President Barack Obama, calls for about $450 billion in revenue from increasing the top rate on million-dollar-plus income from 35 percent to the Clinton-era rate of 39.6 percent.
The additional revenue would be collected through a rewrite of the tax code next year and by slowing the inflation adjustments made to tax brackets.
In return, Boehner is asking for $1 trillion in spending cuts from government benefit programs like Medicare. Those cuts would defer most of a painful set of across-the-board spending cuts set to slash many domestic programs and the Pentagon budget by 8-9 percent, starting in January.
Boehner also continues to press for a less generous inflation adjustment for Social Security benefits, a move endorsed by many budget hawks. Obama and Democrats on last year's deficit "supercommittee" endorsed the idea in offers made last year, but they're more reluctant now.
Democrats rejected the offer and some say an increase in the Medicare eligibility age is a non-starter. They are also pressing for extended jobless benefits for the long-term unemployed.
UPDATE: 9:30 p.m. ET--
Boehner's office said Sunday that the speaker's stance on the debt ceiling has not changed.
“Our position has not changed,” Boehner spokesman Michael S. Steel said in a statement. “Any debt limit increase would require cuts and reforms of a greater amount.”