In a major counteroffer that moves the White House and congressional Republicans closer to resolving the "fiscal cliff" standoff, President Barack Obama is seeking $1.2 trillion from higher tax revenues, including increased rates on those earning more than $400,000 a year, a source familiar with the negotiations said on Monday.
In exchange, the president is willing to agree to $1.22 trillion in spending reductions, including some cuts achieved by changing the way cost of living adjustments are made to Social Security retirement benefits and other programs.
"We view this as a good offer that shows we have met the Republicans more than halfway on spending and halfway on revenues," the source said.
The offer asks for Congress to increase the national borrowing ceiling for two years using a parliamentary procedure proposed by Senate Republican leader Mitch McConnell.
The offer comes as the president and House of Representatives Speaker John Boehner seek to iron out differences in an effort to stop automatic tax increases and spending cuts from going into effect early next year. Analysts have warned that abrupt shock could knock the economy back into recession.
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.
However, the president's proposal would seek to protect those on whom that change would fall hardest, the source said.
The president's offer also would seek to provide the sluggish economy a boost by extending unemployment benefits and increasing infrastructure spending.