In new 'cliff' bid, Obama seeks $1.2 trillion in revenue: source

Obama

Apparent concessions by the president, who originally proposed $1.6 trillion in new tax revenues, and the House speaker's willingness to entertain the proposal, raised hopes that the two sides can find a way to avoid the dreaded fiscal cliff.

"Everyone I talk to is increasingly optimistic that folks are more serious about a deal maybe Dec. 24 or 31, but a deal nevertheless. We'll see," a lobbyist for a major U.S. Financial services firm said.

The president's latest offer shows him willing to give on an item that some of his supporters had sought to protect linking Social Security benefit increases to the chained consumer price index, a step that would lead to lower payments.

"The chained CPI would be a growing benefit cut that is most harmful for the oldest and poorest beneficiaries of Social Security," said Dave Nathan, a spokesman for AARP, which represents older Americans.

However, the president's proposal would seek to protect those on whom that change would fall hardest, the source said.

The chained, or superlative, CPI, is considered a more accurate gauge of inflation that the government began to report in 2002. It is estimated to be 0.22 percentage points lower than

the traditional CPI.

Obama's offer asks for Congress to increase the national borrowing ceiling for two years using a parliamentary procedure proposed by Senate Republican leader Mitch McConnell. That demand may be a hard sell for many lawmakers who may be reluctant to relinquish power over the nation's purse strings.

The president's offer also would seek to provide the sluggish economy a boost by extending unemployment benefits and increasing infrastructure spending.

Obama's proposal would stop harsh automatic spending cuts due to go into effect under the sequestration process.

However, some automatic cuts would continue to hang over the administration and Congress's heads as a prod to work out further budget reforms.

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