THE WHITE House said yesterday it would not accept an offer from the Republicans to hike taxes on the richest in exchange for spending cuts, as the United States lurches towards a string of automatic austerity measures and tax rises known as the fiscal cliff.
John Boehner, who leads Republicans in the House of Representatives, offered in a phone call to the President to vote for higher taxes on those earning more than $1m (£618,500) a year, in exchange for reforms that lead to lower federal spending in future. This appeared to be a U-turn on the Republicans’ pledge never to raise income taxes.
Barack Obama’s administration wants to let taxes rise on earnings above $250,000 a year, but renew the Bush-era tax cuts for those earning less.
This offer came as part of desperate discussions between the two parties to stop the world’s biggest economy going over the fiscal cliff in the new year, which many economists think will push the country back into recession.