Pres. Obama, House Speaker Boehner meet again on fiscal cliff

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WASHINGTON (CNN) — President Barack Obama and House Speaker John Boehner met at the White House on Monday after the leading Republican negotiator made expected concessions over the weekend that moved the negotiations to a new level.

The 45-minute meeting was their third face-to-face talk in eight days, a sign of acceleration in the negotiations that seek to avert the automatic tax increases and spending cuts of the fiscal cliff set to take effect in the new year.

Sources told CNN over the weekend that Boehner’s latest proposal dropped Republican opposition to two key demands by Obama — higher tax rates on the wealthiest Americans and an automatic extension of the federal debt limit.

Boehner’s office insisted that no deal had been reached, but didn’t dispute the information from the sources about the concessions.

“The lines of communication remain open, but there is no agreement, nor is one imminent,” said Boehner’s spokesman, Michael Steel.

Congress had been scheduled to end its work last week, but legislators were returning Monday and leaders warned members to be prepared to stay until Christmas and then return after the holiday until the year’s end.

While the latest twists in the negotiations indicate a possible breakthrough, Boehner’s offer also included hardline positions on spending cuts and reforming entitlement programs such as Social Security, Medicare and Medicaid that are opposed by Obama’s liberal base.

The Ohio Republican’s move sought to shift the onus on Obama to bring the Democratic position on spending cuts and entitlement reforms closer to the changes sought by the Boehner and the GOP.

Obama has repeatedly said that once Republicans accepted that tax rates on high-income Americans must increase, he would be willing to negotiate on other issues.

The president also has insisted that raising the federal debt ceiling should be separated from the political process of negotiating deficit reduction.

With the federal debt approaching the current ceiling of $16.4 trillion, Boehner’s new offer would allow the government to again raise the borrowing cap — a move that has faced strong GOP opposition since Republicans swept the U.S. House in 2010.

Boehner has consistently insisted that any increase in the debt limit must be offset by equal or greater spending cuts.

It was not immediately clear if his new proposal yielded on that demand, or whether Boehner will insist that proposed spending cuts in his plan must offset any debt limit increases.

According to one source, who spoke on condition of not being identified further, Boehner also proposed allowing tax rates on household income at $1 million and above to return to the higher rates of the 1990s while extending current reduced rates for all income up to that threshold.

In addition, his proposal includes what is called a chained consumer price index, which takes into account changes in quantity and prices of products, and an increase in the age of eligibility for Medicare, according to a source familiar with the talks.

Those two steps would affect benefits for seniors and other participants in entitlement programs, and labor unions and advocacy groups for the elderly were expected to oppose them.

The consumer price index is applied to many entitlement benefits, such as Social Security, to protect participants against rising prices. The chained CPI includes assumptions on consumer habits with regard to rising prices, such as seeking cheaper alternatives, and would result in smaller benefit increases in future years.

A source familiar with the talks called Boehner’s offer “insufficient on revenue and rates.”

However, the White House does consider it “progress” and reiterated Steel’s statement, saying that the “lines of communication are open,” the source said.

Obama and Boehner did not speak Sunday, sources said.

The president demands that tax rates increase on incomes over $250,000, a stance that was central to his re-election campaign and is supported by most Americans, according to consistent poll results.

Boehner has been under pressure from the White House, Democrats, the business community and some fellow Republicans to give up a staunch opposition to any increase in tax rates.

A separate source said there was not enough time to get a deal passed before Christmas. If a deal is reached soon, then passage by January 1 would be tight but achievable, the source said.

Last week, U.S. Rep. Chris Van Hollen, D-Maryland, said a deal would have to be reached by Christmas to allow enough time for the legislative process to approve the required measure or measures by the end of the year.

Boehner previously had offered to increase tax revenue by eliminating unspecified deductions and loopholes, but drew the line at allowing any rates to go higher.

Conservatives trying to shrink the federal government generally oppose increasing tax revenue. They are particularly opposed to higher tax rates because history shows that once rates go up, it is difficult to later reduce government revenue by lowering them again.

Obama and Democrats argue that increased revenue, including higher tax rates on the wealthy, must be part of broader deficit reduction to prevent the middle class from getting hit too hard.

Boehner met Thursday afternoon with Obama at the White House in their second face-to-face talks of the week. The two then spoke by phone Friday, according to news reports.

CNN’s Jessica Yellin, Dan Lothian, Dana Bash, Deirdre Walsh and Brianna Keilar contributed to this report.