It doesn’t increase the tax rate on high-income earners so I’m assuming Obama will reject it out of hand.
House Republican leaders on Monday endorsed a far-reaching plan to rein in the national debt that that would raise $800 billion in new tax revenue, slice $600 billion from federal health programs and apply a stingier measure of inflation to Social Security benefits.
In a letter to President Obama, House Speaker John A. Boehner (R-Ohio) and other senior Republicans suggested that the framework – first laid out by Democrat Erskine Bowles during last year’s budget battles – should serve as a starting point for budget talks aimed at averting the year-end fiscal cliff.
“With the fiscal cliff nearing, our priority remains finding a reasonable solution that can pass both the House and the Senate, and be signed into law in the next couple of weeks,” the letter says. “The best way to do this is by learning from and building on the bipartisan discussion that have occurred [earlier in] this Congress.”
The framework serves as a counter-offer to the plan Obama laid on the table last week, essentially a reprise of his most recent budget request. While both frameworks would reduce borrowing by more than $4 trillion over the next decade, Obama’s proposal would raise $1.6 trillion in fresh revenue – double the GOP plan – and produce only about $350 billion in savings from Medicaid and Medicare, the biggest drivers of future borrowing. [...]
The proposal calls for $800 billion in higher tax collections through an overhaul of the tax code next year that would push the top rate below the current 35 percent and raise cash by wiping out loopholes and deductions.
The plan also seeks $600 billion in health savings; one option, GOP aides said, would be raising the Medicare eligibility age from 65 to 67. It also includes $300 billion in savings from other mandatory programs, such as farm subsidies. And it would save $200 billion by applying a less generous measure of inflation government wide, including to Social Security benefits, which would rise more slowly as a result.
The GOP plan also seeks another $300 billion in cuts to agency budgets on top of the $1 trillion in cuts already enacted. All told, it would produce $2.2 trillion in new savings – or $4.6 trillion when measured against the same yardstick as the president’s proposal.
WASHINGTON — White House Communications Director Dan Pfeiffer rejected Speaker of the House John Boehner’s counter-proposal to avert the fiscal cliff in a statement to reporters Monday afternoon.
“The Republican letter released today does not meet the test of balance,” Pfeiffer said. “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.”
President Barack Obama has pledged to oppose any agreement that does not raise tax rates on the top two percent of wage-earners.