FILE - In this Dec. 10, 2012 file photo, fog obscures the Capitol dome on Capitol Hill in Washington. Big tax increases will hit millions of families and businesses a lot sooner than many realize if Congress and the White House don't agree on a plan to avoid the year-end fiscal cliff of automatic tax increases and government spending cuts. In fact, they already have. More than 70 tax breaks enjoyed by individuals and businesses already expired at the beginning of this year. If Congress doesn't extend them, a typical middle class family could get a $4,000 tax hike when they file their 2012 returns next spring, according to a private analysis. At the same time, businesses could lose dozens of tax breaks they have enjoyed for years. (AP Photo/J. Scott Applewhite)
WASHINGTON (AP) - President Barack Obama has proposed a deficit-reduction package to House Speaker John Boehner (BAY'-nur) that would increase the top tax rates on taxpayers earning more than $400,000, cut more spending from health care programs and add $200 billion more in spending cuts over 10 years to his earlier offer.
Boehner had proposed an earnings threshold of $1 million for higher rates. Obama dropped his demand that individuals making more than $200,000 pay higher rates.
People familiar with the plan said Obama is proposing lower cost-of-living adjustments for Social Security. He also abandoned his request to extend a payroll tax cut - a move that would result in a tax increase for many Americans.
The offer doesn't include an increase in the Medicare eligibility age, a potential sticking point in negotiations.