Obama, Boehner Speak by Phone on Fiscal Cliff

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WASHINGTON (AP) -- President Barack Obama and House Speaker John Boehner discussed the fiscal cliff Wednesday in a telephone call. It followed several days of political sparring over steps to prevent a year-end series of tax increases and spending cuts.

The call raises the possibility that negotiations will soon resume between the White House and congressional leaders.

Obama is demanding that Republicans agree to raise tax rates at upper incomes as part of a deal to rein in future deficits. GOP leaders say they will agree to higher revenue, but they want to close loopholes or reduce tax breaks rather than raise rates.

WASHINGTON (AP) -- As President Barack Obama sees it, tax rates for the top 2 percent of earners would have to go up as part of a debt-cutting deal to avoid automatic spending cuts and tax hikes next month.

But he tells Bloomberg Television the rates could then be lowered next year as part of a tax overhaul that closes loopholes and limits deductions.

And Obama is signaling flexibility on where the rates eventually wind up. Obama says he knows he won't get everything that he wants in negotiations with congressional Republicans.

The president campaigned for re-election on a plan to raise the rates on the top 2 percent of income earners to 39.6 percent, which is where they were under former President Bill Clinton.

Meanwhile, the counteroffer that was put forward by House Speaker John Boehner (BAY'-nur) to avoid the "fiscal cliff" is coming under fire from within his own party.

Republican Sen. Jim DeMint of South Carolina, a leader of tea party conservatives in Congress, is denouncing the $800 billion in higher tax revenue over 10 years that would come from the speaker's plan.

DeMint says it's a "tax hike" that will "destroy American jobs and allow politicians in Washington to spend even more" -- while failing to reduce the debt.

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