Why guaranteed lifetime withdrawal benefit election rates continue to rise.
President Barack Obama backed off from demanding tax rates rise on incomes above $250,000 a year, The New York Times and Wall Street Journal reported Tuesday.
Obama's new offer in intensifying "fiscal cliff" talks with House Speaker John Boehner, R-Ohio, is to change the figure to $400,000, so the George W. Bush-era tax rates would expire for households making more than that amount a year rather than $250,000, people familiar with the meeting told both newspapers.
Obama's offer, in a 45-minute White House meeting Monday, would also raise tax revenues $1.2 trillion over the next decade, down from $1.4 trillion, the people said. Obama originally called for $1.6 trillion.
The latest offer brings Obama closer to a plan proposed by Boehner Friday, and both sides told the Times they were confident Obama and Boehner were closing in on a major deficit-reduction plan that could be passed before Jan. 1, when more than a half-trillion dollars in automatic tax increases and spending cuts would otherwise kick in.
Boehner aides told the Journal Obama's offer still asked for too much tax revenue and not enough spending cuts.
But spokesman Brendan Buck said in a statement: "Any movement away from the unrealistic offers the president has made previously is a step in the right direction. We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem."
Boehner was to meet with House Republicans Tuesday morning to discuss the talks, senior GOP aides told the Times.
As part of the latest offer, Obama agreed to accept a GOP proposal to slow Social Security spending growth by calculating cost-of-living increases differently, the newspapers said. The new inflation formula would save $122 billion over 10 years, the Times said.
To soften Democratic resistance to the formula change, Obama's plan would include protections for beneficiaries deemed "most vulnerable," the Journal said.
The $122 billion in savings was part of $800 billion in program cuts Obama proposed, including $400 billion from federal healthcare programs, $200 billion from "mandatory programs" such as farm price supports, $100 billion from military spending and $100 billion from domestic programs under Congress's annual discretion, the Times said.
Obama's offer did not include raising the Medicare eligibility age to 67 from 65, a Republican proposal opposed by many Democrats, the Journal said.
His offer also called for increased infrastructure spending, a temporary extension of unemployment insurance benefits and a permanent extension of other tax breaks that expire at the end of the year, the Journal said.
But his offer does not include a push to continue the current payroll tax cut, the Journal said. That means the amount of tax paid by virtually all earners would likely increase next year.
A temporary payroll tax cut, in place the past two years to help boost the economy, expires Dec. 31.