GOP presents $2.2 Trillion plan to avoid fiscal cliff.

[Recliner Pilot 61]

Of course, the Dems immediately said it wasn't a 'balanced approach' because it contained both cuts and revenue increases. Their idea of "balanced approach" is all tax increases.

House GOP makes a $2.2 trillion debt counteroffer to Obama on cliff

 

House Republican leaders on Monday made a counteroffer to President Obama in the “fiscal cliff” negotiations that would cut $2.2 trillion from the deficit with a combination of spending cuts, entitlement reforms and $800 billion in new tax revenue.

 

Republican officials said their 10-year plan contained more deficit reduction than the offer the White House presented last week while standing firm against Obama’s demand to increase tax rates on the wealthy.

 

The White House quickly panned the offer, saying it contained “nothing new” and did not “meet the test of balance.”

 

The Republican offer came in the form of a three-page letter to the White House signed by House Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.) and four other senior Republicans, including Rep. Paul Ryan (Wis.), the party’s just-defeated vice presidential nominee.

 

The offer marks the second significant movement in the fiscal talks in the last week, after Treasury Secretary Timothy Geithner outlined an Obama proposal that called for $1.6 trillion in tax increases, $400 billion in entitlement program savings and $50 billion in new stimulus spending, among other provisions. The president is also seeking to permanently limit the ability of Congress to block an increase in the debt ceiling.

 

“What we are putting forward is a credible plan that deserves serious consideration by the White House,” Boehner told reporters in a brief appearance at the Capitol. He characterized it as a response to what he called the “la-la land” offer that Geithner presented to congressional leaders last week.

 

 

 

The Speaker last spoke to Obama on Wednesday and indicated he did not plan to personally present his offer to the president. “I think the letter’s appropriate,” he said.

 

 

 

 

Boehner was scheduled to attend the White House holiday party on Monday evening. Asked if he might speak to Obama there, the Speaker smiled and replied, “I might run into him.”

 

Republicans said their offer was based on a proposal outlined by Erskine Bowles, the former chief of staff to President Clinton, in testimony last year before the congressional “supercommittee” on deficit reduction. That offer is distinct from the widely cited Simpson-Bowles deficit plan released two years ago.

 

Bowles rejected the comparison, and said that while he was “flattered” by the citation, the GOP letter “does not represent the Simpson-Bowles plan, nor is it the Bowles plan.”

 

The Republican counteroffer does not include an increase in the debt ceiling, but a GOP aide said the party remained open to negotiating additional borrowing authority for the Treasury before the end of the year.

 

GOP officials said their offer amounted to $4.6 trillion in deficit reduction when compared directly to the White House offer, because in its own $4 trillion deficit plan, the White House counts legislation that has already been enacted, savings from future interest on the debt, and savings from the end of the wars in Iraq and Afghanistan. Republicans do not count those as new savings, so their offer amounts to $2.2 trillion in future deficit reduction.

 

The $800 billion in new tax revenue matches what Boehner offered Obama during their 2011 negotiations for a grand bargain. Republicans are holding the line against tax rate increases, and believe the $800 billion in revenue can be raised from the wealthy through other means, which their offer does not specify.

 

The GOP also did not specify what kind of revenue the party would accept as an immediate down payment in 2013, and aides said their goal remained a comprehensive tax overhaul that would generate $800 billion in new revenue while lowering overall rates.

 

Democrats rejected that approach.

 

“The Republican letter released today does not meet the test of balance,” White House communications director Dan Pfeiffer said in a statement. “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.

 

“Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won’t be able to achieve a significant, balanced approach to reduce our deficit our nation needs,” Pfeiffer added.

 

Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) also criticized the GOP proposal, saying it would force the middle class to pay higher taxes.

 

“Republicans have made an offer, but now it is time for them to get serious about forging a balanced approach,” Reid said.

 

Pelosi said Democrats would move ahead with a discharge petition on Tuesday to try and force Republicans to bring up a Senate-passed bill extending current tax rates on annual family income up to $250,000.

 

A spokesman for Boehner responded by challenging Democrats to come up with something better.

 

“If the president is rejecting this middle-ground offer, it is now his obligation to present a plan that can pass both chambers of Congress,” said Boehner spokesman Brendan Buck.

 

Senior Republican aides argued that their offer represented a “fair middle ground” because unlike the White House, they did not use their budget proposal as their opening bid. The House budget contains no revenue increases and included far-reaching changes to Medicare and Medicaid that Democrats consider non-starters.

 

“We’re not doing that today, because we don’t have time,” one top GOP aide said, speaking on condition of anonymity during a background briefing.

 

The House counteroffer drew immediate praise from Senate Republican Leader Mitch McConnell (Ky.), who issued a statement calling it a “good-faith effort to find common ground.”

 

The letter sent by the full House leadership, along with Ryan, indicates Boehner has the full support of key players in his conference.

 

“This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform,” the leaders wrote in their letter to Obama. “Indeed, the Bowles plan is exactly the kind of imperfect but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs. We believe it warrants immediate consideration.

 

“If you are agreeable to this framework,” they continue, “we are ready and eager to begin discussions about how to structure these reforms so that the American people can be confident that these targets will be reached.”

 

In addition to the $800 billion in revenue, the Republicans are proposing $600 billion in health savings, $300 billion in savings from other mandatory spending and $300 billion in further cuts to discretionary spending.

 

The GOP is also proposing to raise $200 billion through changes to the way inflation is calculated for the purpose of determining benefits and tax policy across a range of programs, including Social Security.

 

The offer is consistent with a framework that leaders in both parties have agreed to: averting the looming tax hikes and spending cuts with a “down payment” of deficit reduction while settling on targets for tax and entitlement reform in 2013.

 

The Republican proposal does not specify what would be immediately enacted as a down payment, and aides said it could replace the $1.2 trillion in automatic spending cuts set to begin taking effect next year, although it does not explicitly eliminate them.

 

http://thehill.com/homenews/house/270649-house-republicans-make-22t-counter-offer-to-obama-in-debt-talksklj

[Vikings4ever 568]

For all the talk about the rich not paying their fair share due to loopholes and knowing how to work the tax code, you'd think Democrats would support closing loopholes and simplifying the tax code, which would raise revenues, rather than just raising tax rates

[Recliner Pilot 61]

Dems know how thick their base is. They can comprehend "raise tax rates on the evil rich". Once you start talking about eliminating deductions they don't have a clue WTF you are talking about.

 

It's the old KISS principle, and the Dems have to keep it a simple as possible for their base to grasp it.

[Vikings4ever 568]

Dems know how thick their base is. They can comprehend "raise tax rates on the evil rich". Once you start talking about eliminating deductions they don't have a clue WTF you are talking about.

 

It's the old KISS principle, and the Dems have to keep it a simple as possible for their base to grasp it.

It doesn't help that nearly every headline about it was that Republicans wouldn't raise taxes on the rich, completely ignore taxes and tax rates are completely different things.

[Recliner Pilot 61]

We have our fair share (hehe) of those morons here on the bored. Many were shocked when I demonstrated to them the the Bush "Tax cuts for the rich" resulted in the "rich" paying a bigger share of the total tax burden than they did under Clinton's rates.

[Recliner Pilot 61]

Good advice for the Reps.

 

 

 

Keith Hennessey: Time to Call the President's Budget Bluff

Republicans have more leverage than they imagine, if they play their cards carefully.

 

Flush with the adrenaline rush of his election victory, President Obama insists that Congress must now agree not only to raise taxes on the "rich," but also to adopt his previously ignored full budget. The president demands a $1.6 trillion tax increase over the next decade. He maintains that higher revenues must come from marginal-rate increases but offers no policy rationale. He wants to treat $900 billion in spending cuts he agreed to in 2011 (as part of the Budget Control Act) as if they now count on his ledger as new cuts. He says that he will consider Medicare cuts and tax reform in the future, maybe.

 

On the other hand, Mr. Obama says reductions in ObamaCare spending are out of the question, and Congress must now agree to at least $50 billion in new stimulus spending next year. The debt limit must be permanently increased without accompanying spending cuts

 

 

By contrast, House Speaker John Boehner and Senate Minority Leader Mitch McConnell have offered on behalf of Republicans a significant concession in an attempt to close the negotiating gap. Mr. Boehner and Mr. McConnell propose to accept higher taxes on the rich as long as government spending is cut significantly and incentives to work and invest are not weakened. That way, higher taxes and entitlement-spending cuts would reduce future deficits, not finance even bigger government as the president proposes.

 

Unfortunately, it appears that President Obama cannot take yes for an answer. Republican leaders have shown him a legislative path to lock in his top policy priority with a strong bipartisan vote. Their proposal splits their own caucus, yet still the president refuses because he thinks he can get even more.

 

Oklahoma Rep. Tom Cole and a few lame-duck Republicans appear ready to capitulate. Cowed by a bully on the pulpit, afraid of being blamed for a stalemate, and convinced that they have no negotiating leverage, they bravely propose to embrace bigger government—and call it a win. These politicians prioritize their personal popularity over the policy consequences of major fiscal choices.

 

They also misread the negotiating environment. While the president has a strong hand, he is overplaying it. Republicans have some leverage. They need to use it effectively.

 

• The president's veto threat is a bluff. Without a new law, tax increases and spending cuts will likely increase unemployment to 9% and might trigger a new recession. Even if he could shift all the political blame for such a legislative failure onto congressional Republicans, Mr. Obama cannot afford to risk a new recession that would irreparably damage his second term. He can neither veto a budget-deal bill that Congress sends to him, nor can he allow Senate Majority Leader Harry Reid to tie a bill up in the Senate. He can, however, try to bluff Republicans into giving away the store.

 

• The president's proposal for more spending and taxation puts him to the left of many in his own party, and Democrats up for re-election are not lemmings looking to follow Sen. Patty Murray, who has welcomed a plunge over the fiscal cliff. Democratic Sens. Max Baucus and Mary Landrieu oppose the president's proposal to increase the estate tax. Sen. Chuck Schumer has defined "rich" at $1 million of income, much higher than the president's $250,000.

 

Many Democrats don't want to raise taxes on successful small business owners without Republican votes as political cover. Members of both parties are terrified at the prospect of subjecting 27 million additional tax filers to the Alternative Minimum Tax if there is no new legislative "patch," as Congress has annually passed for many years.

 

If exposed to the light of day, these intraparty Democratic divisions provide opportunities for Republicans to negotiate a centrist or center-right agreement. In the short run, this requires Republicans to publicly challenge their Democratic colleagues on these specific policy questions. In the long run, Republicans must refuse to engage in ad hoc summitry and insist upon a return to a regular, committee-based legislative process that includes annual budget resolutions and open-floor amendments.

 

• Republicans can communicate more effectively by changing their tone. They can replace the wild-eyed threats of 2011 with steady negotiation and logical arguments. They can be insistent but not unyielding, firm but flexible. They can explain their policy views to voters and visibly demonstrate that they are trying to reach agreement with a counterparty still stuck in campaign mode. They can argue with their party leaders in private rather than weaken their leaders' hand with public statements that embolden the left and make it harder to reach agreement.

 

• Republicans must be willing to oppose bad policy even if it hurts their popularity. Agreeing to higher taxes is a major concession, and if the president is reasonable, Republicans need to be willing to move further to close a deal. But members of Congress have no obligation to vote for more than a trillion dollars in tax increases without significant spending cuts just because someone else won an election.

 

The president needs House Republican votes to enact a law, and he needs Speaker Boehner to bring a bill to the floor. The president is obliged to convince members of Congress that his proposal deserves their vote. Beyond a certain point, Republicans must be willing to risk undeserved blame rather than vote for damaging policy. Democrats will then be forced to choose whether to moderate their position, risk legislative failure, or take sole responsibility for massive tax increases without entitlement reform. Their unified partisan front will rapidly crumble.

 

• Republicans can leave the debt limit out of this bill. It's a shame that small debt-limit increases must be used as a tool to force future fiscal negotiations. But until the Senate returns to passing annual budgets, frequent debt-limit votes are the only method available to force a recalcitrant Democratic Party to address entitlement spending problems.

 

• Finally, Republicans underestimate their ability to win the fiscal-policy argument in the public arena. If everyone's taxes go up, voters will instinctively blame the party of higher taxes. Mr. Obama has spent two years hammering the country about the fairness of redistribution—but Republicans have inoculated themselves against additional demagoguery by conceding and proposing that the rich pay more.

 

The president's broader fiscal argument is even weaker. He demands new stimulus spending, abandons deficit reduction and serious entitlement reforms, double-counts previously enacted savings, and labels tax increases as a balanced approach. Republicans can win this debate and gain further negotiating leverage if they are willing to try.

 

http://online.wsj.com/article/SB10001424127887323353204578128743895217834.html

[Voltaire 5,387]

This GOP plan is far better than Obama's plan but both are significantly less attractive than the fiscal cliff.

 

Still a long, long way to go to get to something that looks like Simpson-Bowles.

[MTSkiBum 1,625]

This GOP plan is far better than Obama's plan but both are significantly less attractive than the fiscal cliff.

 

Still a long, long way to go to get to something that looks like Simpson-Bowles.

 

I agree completely.

 

The federal budget deficit is 1.1 trillion dollars this year. The republican plan is to reduce the budget deficit by 2.2 trillion over 10 years. This equates to reducing the budget deficit by 220 billion a year, that means there is still 900 billion a year in federal budget deficit spending that needs to be accounted for.

 

The republican plan still adds 9 trillion to the deficit over the next decade. Both the republicans and the democrats are arguing over pennies