Baucus: At least $1 trillion needed in cliff deal

Also on Thursday, House Speaker John Boehner (R-Ohio) said that negotiators were making little progress to avert automatic spending cuts and tax increases.

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Both Boehner and Senate Majority Leader Harry Reid (D-Nev.) blamed the opposing party for that lack of momentum, after they met separately with Treasury Secretary Tim Geithner and other administration officials on Thursday.

The parties are accusing each other of lacking specifics when it comes to spending cuts, but Baucus told Bloomberg Television that that GOP's criticism was off base.

“The president has put spending cuts and entitlements on the table. It is right there in the budget,” Baucus said. “My thought is if the Speaker has problems with any of the provisions, he should say 'I like these; I like those,' and that could be the beginning of the conversation."

Baucus himself said this week that “chained CPI,” an inflation formula that could lead to both new revenues and savings in Social Security, should be on the table.

At the same time, a senior Democratic aide also told reporters on Thursday that because Democrats had come up with a specific proposal on revenue, it was up to Republicans to lay out a plan on entitlements. 

On the revenue side, Baucus said that the top tax rate might not have to rise to 39.6 percent, the Clinton-era level it will return to unless Washington acts on the fiscal cliff.

The Finance Committee chairman also said it could be easier to limit tax deductions to a percentage of a taxpayer’s income could be easier than capping deductions at a certain amount. 

“My general view in large discussions like this is that very little should be taken off the table,” Baucus said. “You're trying to develop trust and confidence and to get an agreement. Once you start taking things off the table, people take their item off the table.”