The fiscal cliff - John Boehner's counter-offer

John BoehnerHOW unexpected! It seems we will have a real negotiation over possible solutions to avoid the fiscal cliff after all. John Boehner has responded to the Obama administration's initial proposal with a counter-offer, and the White House has not immediately dismissed it. Mr Obama's proposal raised taxes by $1.6 trillion over ten years, mainly by allowing the expiration of the Bush tax cuts on income over $200,000 per year ($250,000 for couples), and cut spending by $600m over ten years, with most coming from Medicare. Meanwhile, Mr Boehner's proposal would raise revenues by $800m over ten years by closing loopholes rather than raising rates, and cut $1.2 trillion in spending. Some $600 billion would be cut out of Medicare, Medicaid and Obamacare; $300 billion would come from mandatory spending, and $300 billion from discretionary spending. Seems like there's room for negotiation there! But of course the devil's in the details. So, as for Mr Boehner's specific tax increase proposals...
Under the Republican offer, tax revenue would rise by $800 billion over 10 years, through closing loopholes and ending or curtailing deductions and tax credits. Mr. Boehner did not specify on Monday which tax breaks would be curtailed.
Right. Never mind. Check this space again when Mr Boehner explains how he expects to get $800 billion in deduction limits over ten years without creating tax humps, and then makes it clear to the American people that what he wants is to slash the charitable giving and home-mortgage interest deductions. That will at least be an interesting political spectacle

Read the full story here.


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