Republican softens stance on tax rises, saying Americans don't need more stress after school shootings.

Negotiations between the White House and Republicans over a complex package of measures to start narrowing the giant gap between what America spends every year and what it collects in taxes appeared yesterday to have accelerated with both sides offering concessions.

Obstacles still remain and even if the United States Republican Speaker of the House, John Boehner, indeed hammers out a compromise plan with President Barack Obama as early as this week he will still struggle to persuade some members of his own party to vote for it.

Some on his right flank will baulk if it includes tax increases for the rich.

Much is at stake because a failure to reach a deal by January 1 will mean the automatic triggering of an array of painful austerity measures including quite significant tax rises for almost every working American and a raft of painful spending cuts. The chilling effect could be enough to knock the US back into recession.


Boehner told Republicans he would prepare a back-up bill with cuts and higher taxes for families earning over US$1 million ($1.2 million) just in case the talks fall apart. But clearly he hopes that won't be needed. "I continue to have hope that we can reach a broader agreement with the White House," he told reporters.

Obama has lowered his 10-year tax revenue goals from the US$1.6 trillion he originally sought. His new plan seeks US$1.2 trillion in revenue over 10 years and $1.2 trillion in 10-year spending cuts.

The ice broke on Saturday when Boehner for the first time offered some degree of tax-rate rises on the rich. He made the offer quietly while the country was focused on the school shooting in Connecticut. There is also some indication that the tragedy has meant a softening of partisan belligerence in Washington.

"Americans don't need more stress at this time," Boehner said last night.

The distance each must travel to reach a deal is now relatively small. Essentially, Boehner wants a balance between US$1 trillion in spending cuts and US$1 trillion in new revenues over 10 years. Obama wants less pain on spending and more meat on the revenue side.


Amount Boehner wants in spending cuts and new revenues over 10 years



Obama's target, down from US$1.6 trillion (NZ Dollars).

- Independent