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

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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