UPDATE 1-Obama making 'good faith' bid for 'fiscal cliff' deal -White House

Tue Dec 18, 2012 3:07pm EST

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WASHINGTON Dec 18 (Reuters) - The White House defended its latest offer in negotiations to avert the looming "fiscal cliff" against both Republican criticism that President Barack Obama did not go far enough and possible liberal concerns that the president conceded too much, saying it is a "good faith" effort to reach a compromise.

"The president has demonstrated an obvious willingness to compromise and move more than halfway toward the Republicans," White House spokesman Jay Carney told reporters.

Obama on Monday proposed a deal that would raise $1.2 trillion in tax revenues in part by allowing tax rates to rise on Americans earning more than $400,000 a year. The president offered Republicans just over $1.2 trillion in spending cuts that would come in part from reductions in Social Security benefits to elderly Americans in return.

Obama and Congress are seeking a deal to avert sweeping tax increases and deep, automatic spending cuts - dubbed the "fiscal cliff" - due to go into effect next month.

House of Representatives Speaker John Boehner, the top Republican in Congress, greeted the president's latest proposal as a positive step but faulted it for providing too little in the way of spending cuts.

Boehner came back with a plan to let taxes rise only on those making more than $1 million a year even as broader budget talks continue, an offer the White House rejected within hours.

"The proposal essentially is to give another big tax cut to the wealthiest Americans at a time when we cannot afford it," Carney said.

The Obama administration said its concessions were the price of making a deal and included provisions to shield people on whom some of the changes might fall particularly hard. The president pledged during his successful re-election campaign that he would seek tax hikes on those earning above $250,000.

"The fact that he's willing to compromise and have rates go up on those making $400,000 and above as opposed to $250,000 and above demonstrates his good faith effort here to reach a compromise," Carney said.

By changing the way cost-of-living increases in Social Security benefits would be calculated, the administration estimated it could trim spending by $130 billion over 10 years.

Democrats have sought to prevent a wide-ranging deficit reduction process from cutting into Social Security benefits. Carney defended the cost-of-living offer as "technical." He said it reflects a movement to reform cost-of-living adjustments that many economists believe overstate the rise of inflation.

"This is a technical adjustment that supporters of it and economists - outside economists - say is meant to make the government's estimates of inflation more accurate," he said.

As part of the president's proposal, there is a clause that would protect vulnerable people, including the very elderly, when it comes to Social Security recipients, he added.

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