President Barack Obama smashed a completed fiscal-cliff deal with a last-minute demand for increased spending in 2013, according to an e-mail from the GOP’s Senate leader, Mitch McConnell.
Under the deal, planned tax increases on middle-class Americans would be cancelled, but Obama insisted on raising tax rates on Americans earning more than $400,000 per year.
“They’re holding that [deal] hostage” to boost 2013 spending, GOP Sen. Bob Corker said shortly after Obama lauded the pending agreement.
“The tax piece is complete and done as of last evening at 1:45 a.m. I thought the entire deal was sealed. Early this morning, the White House called demanding that we also turn off the sequester,” said the email, signed “Mitch.”
The sequester refers to scheduled cuts in spending during the first nine months of 2013. Half of the $109 billion in cuts are to be imposed on the Pentagon.
Republicans are seeking budget cuts to reduce the federal government’s annual deficit of $1 trillion, and also to trim the size and reach of government.
In response to Obama’s last-minute demand, McConnell offered to find other spending cuts, according to the email.
“I have recommended that we look to find offsets to buy down two months of the sequester and have offered several ways to pay for this,” McConnell wrote.
However, “the White House has yet to find a way to agree to any of $100 billion of various proposals that I have suggested but we are continuing to talk. I intend to bring us all together as soon as this issue is resolved to talk in greater detail.”
Obama’s demand for removal of the sequester — which he first proposed in 2011 — is likely to antagonize GOP leaders who want to trim federal spending.
In contrast, progressives want to increase spending that broadens the reach of government.
The president’s negotiating position may also torpedo the pending fiscal cliff deal, in part, because that deal raises taxes by roughly $700 billion over 10 years, but does not trim federal spending.
In a brief floor speech at 2:50 p.m., McConnell urged quick passage of the tax deal, saying the Senate should not “hold up protecting Americans from the tax hike that will take place in about 10 hours.”
But he downplayed the disagreement over Obama’s demand for extra 2013 spending. After passage of the tax deal, he said, legislators can work “on smarter ways to fight spending.”