House Republicans sent a counterproposal to avert the "fiscal cliff" to the White House on Monday outlining a $4.6 trillion deficit reduction proposal without raising tax rates.
President Obama and Senate
Democrats have said that without a deal to raise tax rates on the
wealthiest Americans there is no path forward to avert the fiscal cliff
at the end of the year when George W. Bush-era tax rates expire and $1.2
trillion in spending cuts over 10 years are triggered.
Republicans' proposal is based on a framework outlined last year by
former Clinton White House chief of staff Erskine Bowles, who co-chaired
Obama's debt commission, and included an increase in the eligibility
age for Medicare benefits. Republicans did not offer specific language
on raising the age in their proposal, but Bowles has supported raising
the age to 67. Boehner called it a "la-la land offer" on Monday.
and House Speaker John Boehner, R-Ohio, also discussed gradually
raising the Medicare eligibility age from 65 to 67 during their
unsuccessful talks on deficit reduction in 2011.
putting forth is a credible plan that deserves serious consideration by
the White House and I would hope that they would respond in a timely and
responsible way," Boehner told reporters.
The GOP offer is in
response to a White House plan presented to congressional leaders last
week by Treasury Secretary Timothy Geithner, which was dismissed by GOP
leaders who said its $1.6 trillion request for new tax revenue without
comparable spending cuts or entitlement changes was an unserious
The House GOP plan received a similar reception Monday
from White House communications director Dan Pfeiffer, who said the
Republican plan "does not meet the test of balance. In fact, it actually
promises to lower rates for the wealthy and sticks the middle class
with the bill. Their plan includes nothing new and provides no details
on which deductions they would eliminate, which loopholes they will
close or which Medicare savings they would achieve. Independent analysts
who have looked at plans like this one have concluded that middle class
taxes will have to go up to pay for lower rates for millionaires and
Bowles also took issue with the House plan.
I'm flattered the Speaker would call something 'the Bowles plan,' the
approach outlined in the letter Speaker Boehner sent to the president
does not represent the Simpson-Bowles plan, nor is it the Bowles plan,"
Bowles said in a statement released Monday afternoon.
put forward brings us closer to a deal, but to reach an agreement, it
will be necessary for both sides to move beyond their opening positions
and reach agreement on a comprehensive plan which avoids the fiscal
cliff and puts the debt on a clear downward path relative to the
economy," Bowles' statement said.
At Monday's briefing at the
White House, spokesman Jay Carney said: "What the president believes is
that you cannot mathematically achieve the kinds of revenue that are
necessary for that balanced approach through any other means. So rates
have to rise. And the Republicans need to acknowledge ... that's the
only way to get from here to there."
The House Republicans'
proposal was short on specifics but calls for $800 billion in new
revenue achieved through closing loopholes and capping deductions; $900
billion in health care and other mandatory spending cuts; $300 billion
in spending cuts for discretionary spending, which includes social
programs such as food stamps; and $200 billion gained by changing the
way the government calculates cost-of-living adjustments for Social
Security and Medicare.
The GOP plan achieves enough in deficit
reduction to turn off the $1.2 trillion automatic spending cuts at the
end of the year to resolve that component of the "fiscal cliff," two
senior GOP congressional aides said. They spoke anonymously because they
weren't authorized to speak publicly about the details of the proposal.
The GOP plan does not include any proposal on how to raise the
debt ceiling, which is another non-starter for the White House which
wants to use the fiscal cliff negotiations to include an agreement to
raise the debt ceiling in February when the U.S. is expected to hit its
$16.4 trillion borrowing limit. The president wants to avoid another
debt limit fight with congressional Republicans like the one that
rattled Wall Street in the summer of 2011.
Boehner will attend a
holiday reception at the White House tonight. Asked if he would discuss
his proposal with the president he quipped: "I might run in to him."
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