Boehner Lengthens the Fuse on Austerity Bomb

Boehner Lengthens the Fuse on Austerity Bomb

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After meeting with President Obama on Friday, congressional leaders hinted that a compromise to steer the economy away from the fiscal cliff is taking shape. House Speaker John Boehner told reporters after the meeting that his framework, which he says includes a combination of revenues and spending cuts, is consistent with the president's call for a fair and balanced approach.

An outline of the speaker’s proposal, provided by Boehner’s staff indicates that Republicans acknowledge that they will have to meet the president’s call for significantly higher revenue. “The framework suggests that automatic budget cuts and tax increases scheduled for the new year would be removed and replaced with a different kind of enforcement mechanism that would include both higher taxes and lower spending.”

Boehner said the focus for the remainder of the lame duck session would be on steering the country away from a fiscal crisis, as well as setting up discussions on tax and entitlement reform which will likely begin next spring. “Since tax and entitlement reform are too complex to complete this year, the Speaker noted, our goal for this year, in the coming weeks, is to settle on long-term revenue targets for tax reform as well as targets for savings from our entitlement programs,” according to a Boehner aide.

“Once we settle on those targets, the Speaker proposed, we can create simple mechanisms, in statute, that would achieve those revenue and spending goals. They would be in place unless or until more thoughtful policies replace them.”  -  Read more at Talking Points Memo

HIGHER ED HIRES LOBBYISTS    Since the threat of sequestration began last year, the department of defense has received the most media attention for opposing the automatic spending cuts that are set to take effect next year. However, according to a study by Open Secrets, out of the 421 groups hiring lobbyists to pressure Congress into saving their budgets, the education sector has been the most active, with 91 different organizations, mostly universities, lobbying for a stake in the negotiations.

Under sequestration, domestic discretionary programs are slated to see an 8.2 percent cut to their budgets. Universities are not only worried about cuts to their education programs, but also research programs like the National Institute of Health that will lose out on federal grants subject to the same cuts.

After education, the most active groups lobbying against sequestration are in the health sector, which includes hospitals, pharmacies, nursing homes, and other health related businesses.  -  Read more at Open Secrets

WHITE HOUSE FLOATS SEQUESTER SOLUTION   The Obama administration is weighing a plan to replace the automatic, across-the-board spending cuts set to trigger on Jan 2., with a separate package of targeted spending cuts and tax increases, The Wall Street Journal reports.  The plan would terminate the spending cuts for a period of six to 12 months, and replace them with more targeted reductions and revenue increases. House Republicans have proposed  terminating the cuts to defense programs only and have not agreed to include tax increases as part of any package.  -  Read more at The Wall Street

For more news on the approaching fiscal cliff, follow us on Twitter @Fiscalcliffnote

Brianna Ehley is the former Washington Correspondent for The Fiscal Times. She is currently a reporter on Politico's health care team in Washington, D.C.