White House press secretary Jay Carney said Thursday there will be no deficit deal unless Republicans agree to raise tax rates on the wealthiest households.
“There can be no deal without rates on top earners going up,” said Carney, who reiterated that the president will not sign legislation that extends the Bush-era tax rates for the wealthy.
Carney’s ultimatum came on a day in which both sides dug in and appeared to move farther apart on a deal to prevent tax hikes on most households and crippling spending cuts to defense and non-defense budgets set to hit in January.
Talks have focused on taxes, with Republicans offering new tax revenues but holding firm that they will not agree to raise tax rates on households with annual incomes above $250,000.
The president wants tax rates extended on all households below that threshold, but says rates above it should be phased out.
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If the sides don’t reach a deal, all of the Bush-era rates will simply expire at the end of the year.
Republicans want to focus the talks on spending and entitlements.
Speaker John BoehnerJohn BoehnerBoehner compares Trump to Teddy Roosevelt Boehner: 'Thank God' I wasn't in the middle of election Ryan delays committee assignments until 2017 MORE on Thursday said there had been no progress in the talks over the last two weeks, and demanded that the White House offer specific spending cuts as a concession.
Carney called Boehner’s demand that for spending cuts to be equal to any increase in the nation’s debt limit “deeply irresponsible.”
Treasury Secretary Timothy Geithner and legislative affairs director Rob Nabors met with Boehner and other leaders on Capitol Hill Thursday following a 28-minute phone call between the Speaker and president on Wednesday.
“It was frank and direct and a good conversation,” Carney said of the call.
He said Obama has “put forward very specific cuts” but that the White House hasn’t seen “movement” from Republicans.
“We have seen some important signs of recognition of work that has to be done,” Carney said, but “we're not there yet.”
Still, he acknowledged: “We remain optimistic that this can get done.”