WASHINGTON (AP) — President Barack Obama has agreed to curtail future cost-of-living increases for recipients of Social Security and softened his demand for higher taxes at upper income levels as part of accelerating negotiations with House Speaker John Boehner to avoid a “fiscal cliff,” people familiar with the talks said Monday.
Speaking a few hours after Obama and Boehner met at the White House, these people said the president was now seeking a higher tax rate beginning at incomes over $400,000, up from the levels of $200,000 for individuals and $250,000 for couples that were cornerstones of his successful campaign for re-election.
Obama’s willingness to reduce future cost-of-living increases in Social Security, government retirement and numerous other programs marked another clear concession to Boehner, although it came with an asterisk. The president wants lower-income recipients to receive protection against any loss from scaling back future cost-of-living increases, these officials said.
Nor did Obama’s offer include raising the age of Medicare eligibility from 65 to 67, a Republican goal that has drawn particularly strong objections from Democratic liberals.
Several officials also said during the day that Boehner’s offer late last week to accept higher tax rates included provisions that would mean higher taxes on investment income and dividends earned by wealthy Americans and also in the estate tax.
The people who described the talks did so on condition of anonymity, citing the secretive nature of the discussions.
The maneuvering is aimed at reaching an agreement that would include cancellation of a scheduled year-end hike in taxes for nearly all wage-earners as well as spending cuts at the Pentagon and in domestic programs across the government.
Economists inside and outside the government have warned that the combination of the two, set to begin at year’s end, could send the economy into recession.