Score One for Obama: Boehner Caves on Tax Hikes

WASHINGTON – House Speaker John Boehner has proposed raising tax rates on people making more than $1 million, a source familiar with the talks told Fox News, in a development that could signal at least some movement toward a deal with President Obama.

According to the source, the latest offer is not being rejected, but there are still issues remaining and there is a serious effort to work out the difference.

At issue are expiring Bush-era tax cuts that would automatically vanish on Jan. 1 for virtually every income tax payer if Congress and the president don’t act. Steep budget cuts are also scheduled to kick in, unless Congress and Obama agree to forestall them with other deficit reduction measures.

Some have warned the economy’s nascent recovery would be reversed by the fiscal cliff. Federal Reserve Chairman Ben Bernanke said this week that the economy has already been affected by the uncertainty, and also warned that the Fed would not be able to offset the impact of the fiscal cliff.

Until now, Boehner had maintained his opposition to raising any rates. Instead, he had proposed to raise up to $800 billion in tax revenue over 10 years by limiting tax loopholes and deductions as part of a broad tax overhaul.

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