President Barack Obama made a new budget offer that would raise taxes by $1.2 trillion and increase tax rates for households earning more than $400,000 a year, up from $250,000, said a person familiar with the talks.
Obama's plan would cut $1.22 trillion in federal spending, including interest savings, said the person, who spoke on condition of anonymity. It would change the inflation measure used to calculate Social Security benefit increases. In his offer, Obama would increase the U.S. debt limit for two years.
Obama and House Speaker John Boehner are negotiating to avert more than $600 billion in tax increases and spending cuts set to start in January. Obama presented the offer to Boehner today, the person said.