President Barack Obama’s top economic adviser challenged Republican congressional leaders to put an offer on the table in fiscal-cliff talks and defended Obama’s debt-reduction proposals as concrete and detailed.

Gene Sperling, director of the White House National Economic Council, laid out markers for the negotiations in an interview on Bloomberg Television, saying the president would insist on tax-rate increases for the wealthy, a long-term extension in the legal debt limit, and maintenance of some stimulus measures to support the economy.

Sperling, 53, one of the administration’s principal negotiators, signaled flexibility on how high tax rates would go and the composition of continued stimulus.

“It’s for them now to come forward with their plan, with their details, so that we can start working quickly to getting an agreement,” Sperling said on “Political Capital with Al Hunt,” which airs this weekend.

Obama and congressional Republicans are deadlocked as the year-end deadline approaches for the so-called fiscal cliff, more than $600 billion in spending cuts and tax increases that will be triggered unless Congress acts.

Treasury Secretary Timothy Geithner shuttled among congressional leaders yesterday with a plan to trade $400 billion in cuts to entitlement programs for $1.6 trillion in tax increases, primarily targeting families with more than $250,000 in annual income.

Prolonged Talks

Obama warned of “prolonged negotiations” in an appearance today at a toy factory in Hatfield, Pennsylvania. Republican House Speaker John Boehner declared the talks at a “stalemate,” saying the president hasn’t made a serious proposal for compromise.

Sperling said Obama has offered “very specific savings that have been detailed in our budget.” Obama’s budget proposal includes "$600 billion in entitlement savings, about $350 billion in health entitlement savings, such as in Medicare,” he said.

The president “has made clear” that “you’re going to have rates go up on the most high-income, most fortunate Americans” and “the era of threatening defaults is over,” Sperling said.

Business leaders won’t have the confidence to invest money if they “think that every three to six months we’re going to go through this debacle, this ritual of people threatening the default of the United States as a way to get their way in a budget agreement,” Sperling said.

Stimulus Proposals

Sperling said the administration has advanced proposals to maintain economic stimulus into next year through infrastructure spending, an extension of expiring payroll tax cuts and continuation of extended unemployment benefits. “Those type of measures need to be part of” a deal, he said.

Asked if Obama would agree to a deal that didn’t return the income-tax rate for top earners to the full 39.6 percent rate in effect before President George W. Bush’s tax cuts, Sperling said “there’s no way he’s extending rates at the current Bush level.”

Erskine Bowles, a co-chairman of Obama’s 2010 deficit- reduction commission, said this week that based on a meeting with the president on Nov. 27 he believed there’s some “flexibility” in Obama’s call to let Bush-era cuts on tax rates expire for the wealthiest Americans. Still, he said he thought it was unlikely that Obama and Congress would reach a deal by year’s end to avert the fiscal cliff.

Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access