Speaker Boehner offers up a tax hike for millionaires

Let’s all get together now and pretend that nobody saw this one coming. Negotiations over the fiscal cliff haven’t stopped just because the media’s attention has been drawn elsewhere, and it sounds like John Boehner has served up a new offer to the President. And this one includes “the T word.”

Speaker John Boehner (R-Ohio) has offered to raise the top tax rate for earners making more than $1 million, a source told the Associated Press.

The development in the fiscal talks comes amid pessimism the Speaker and President Obama can hammer out a deal before Christmas.

That’s different than what Obama has been asking for, but it did include a tax hike. Of course, the Speaker put some price tags on the idea of caving on taxes at any level.

The speaker’s offer would not include extending federal unemployment benefits, and it is unclear how it would address sequestration — the tens of billions in spending cuts scheduled to go into effect for the Pentagon and other federal agencies starting Jan. 2.

And Republicans remain unyielding on agreeing to raise the U.S. debt limit as part of any agreement to avoid the fiscal cliff.

He also asked for a change in how we calculate benefits for entitlement programs, commonly known as “chained CPI.” Such a revision to these calculations are estimated to save tens of billions per year on these programs. So does this mean that it’s time to pop open the champagne and celebrate the end of the stalemate?

The source said Obama has not accepted the offer, according to the Associated Press, which added that Boehner is still seeking more spending cuts than Obama has proposed.

Bottom line… no deal. The clock is running out, assuming it’s not already too late. Even if they came to some sort of deal – even a short term, stop gap measure – the two men would still have to sell the plan to their respective parties, somebody would have to draw up the matching bills, and then herd enough cats into the chambers to actually vote for it. Tomorrow morning will come with only two weeks left to accomplish all of that, and the two sides still don’t even have the basic framework of a deal… just an offer which was immediately turned down by the President.

But even though I’ve been saying for more than a month that Obama has no intention of agreeing to a deal, this is the first time that Boehner came forward with an offer that included more taxes. If his offers become too generous and Obama continues to demure, it will become obvious what sort of game he’s playing. And that could cause some political capital to drain out of the bottom of the pool quickly.