2nd Ranking House Dem. Supports Social Security Cuts

By Naftali Bendavid and Carol Lee

GOP Deficit Plan Irks Conservatives

Discord Complicates Negotiating Position of Boehner, Who Punished Four House Members; Obama Calls for Higher Taxes

President Barack Obama discussed the fiscal cliff Tuesday with governors, including Delaware's Jack Markell, left, and Oklahoma's Mary Fallin, right.

WASHINGTON—Conservatives on Tuesday took aim at House Speaker John Boehner's deficit-reduction proposal in the fiscal cliff talks, a dispute that was aggravated by Mr. Boehner's decision to remove some conservatives from prized committees.

Rep. Jim Jordan (R., Ohio), who heads the Republican Study Committee, an influential group of conservatives, criticized the $800 billion in new tax revenue included in Mr. Boehner's proposal to the White House. "The bad news is that it is a tax increase, and I am not going to vote for a tax increase because it hurts economic growth," Mr. Jordan said.

Sen. Jim DeMint (R., S.C.), another conservative leader, said the proposal "will destroy American jobs." Rep. Austin Scott (R., Ga.), president of the 2010 class of House Republicans, added that "I would rather see something that drove [the debt] down further."

Mr. Boehner offered his proposal Monday, and President Barack Obama quickly rejected it in part because it does not include tax-rate increases on high-income earners. Tuesday's conservative protests came as Mr. Obama reiterated his insistence that these rates must go up.

President Obama said Tuesday that a deal still can get done to avoid the so-called fiscal cliff, but he held firm on his demand that any agreement must include higher income-tax rates for the top earners. Colleen McCain Nelson has details on The News Hub. Photo: AP.

It was hard to gauge the extent of the conservative grumbling because many Republican lawmakers said they did not know enough about Mr. Boehner's proposal to judge it. The House Republican leadership is already bracing to lose some members during any vote to seal a potential deal, particularly its most conservative members, whose opposition is assumed.

The conservatives' attitude could nonetheless complicate Mr. Boehner's mission as he strives to negotiate with a re-elected Democratic president without losing so many Republican votes that his leadership would be in peril.

GOP leaders said the criticism underscores how much Mr. Boehner's proposal was an attempt at compromise, while Mr. Obama's proposal, which would raise $1.6 trillion in new taxes, was not.

"The fact that you're not seeing similar blowback from the president's base is that all he's offered is a Christmas list of ideological liberal priorities," said one GOP leadership aide.

Democrats said the disparity reflects Mr. Obama's and their party's strengthened position after the election.

Utah Gov. Gary Herbert discusses his fiscal cliff meetings today in Washington as part of a bipartisan group of governors meeting with President Obama at the White House and congressional leaders, including House Speaker John Boehner. Photo: AP.

Both sides said efforts to reach a deal are continuing. Mr. Obama, in his first interview since his re-election, suggested one way out of the impasse would be to raise tax rates on upper-income Americans in the short term but bring them down in the long term.

"Let's let tax rates on the upper-income folks go up," Mr. Obama told Bloomberg Television. "And then let's set up a process with a time certain, at the end of 2013 or the fall of 2013, where we work on tax reform…and it's possible that we may be able to lower rates by broadening the base at that point." Republicans didn't appear willing to trade a sure-fire rate increase today for a potential decrease next year.

Mr. Obama met with governors at the White House Tuesday and is scheduled to address business executives Wednesday at the Business Roundtable.
Falling Over the Fiscal Cliff

See some scenarios for how different groups of people may be affected by the tax changes that will take place if the fiscal cliff isn't resolved by the Jan. 1., 2013, deadline.

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Democrats have their own divisions to contend with, in particular over entitlements. Some top party officials say these safety-net programs, especially Social Security, shouldn't be part of a deficit-reduction deal. But on Tuesday, Rep. Steny Hoyer (D., Md.), the second-ranking House Democrat, said his party must be ready to consider changes including raising the Medicare eligibility age and slowing cost-of-living increases for Social Security.

Read entire article at the Wall Street Journal

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