Tags: gop | cuts | fiscal | cliff

House GOP Propose $4.6 Trillion in Cuts to Obama

Monday, 03 Dec 2012 03:49 PM

By Newsmax Wires

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House Republicans, rejecting President Barack Obama’s demand for tax rate increases, offered a $4.6 trillion deficit reduction plan today that doesn't raise tax rates on the wealthiest Americans.

The proposal is based on a framework from a year ago outlined by Clinton White House chief of staff Erskine Bowles, one of President Obama's debt commission chairs, and includes an increase in the eligibility age for Medicare benefits, likely to age 67.

"What we're putting forth is a credible plan that deserves consideration by the White House," Boehner told reporters.

Editor's Note The IRS’ Worst Nightmare — How to Pay Zero Taxes

The proposal, contained in a letter today to Obama from House Speaker John Boehner and other Republican leaders, calls for $800 billion in new revenue over the next decade. It would also cut spending on entitlements such as Medicare and Medicaid by at least $900 billion and save another $300 billion through cuts in discretionary spending, according to the letter to Obama.

The House Republican leaders also proposed saving $200 billion by revising the way cost-of-living increases are calculated for Social Security recipients and others, such as retired federal workers.

The White Houre swiftly fired back that the plan "does not meet the test of balance," and that Republicans were clearly not "serious" about averting the fiscal cliff.

"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," he said. "While the president is willing to compromise to get a significant, balanced deal and believes that compromise is readily available to Congress, he is not willing to compromise on the principles of fairness and balance that include asking the wealthiest to pay higher rates ... 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."

After days of stalemate, the Republicans' offer showed deep differences with President Barack Obama as the two sides work to head off across-the-board spending cuts and tax increases due to take effect in January.

But the proposal could allow negotiators to begin their work in earnest as both sides now have outlined their visions in concrete terms. Analysts say the talks will have to show tangible progress this week to ensure that a deal can be signed into law before the end of the year.

"If you are agreeable to this framework, 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," Boehner, of Ohio, and several other House Republican leaders wrote in a letter to Obama.

The Republican proposal would overhaul the complicated U.S. tax code to raise $800 billion in new revenue over 10 years, roughly half the total Obama is seeking.

But the Republicans said they would oppose raising tax rates on the wealthiest 2 percent of U.S. households, a central element of Obama's proposal.

The plan would also trim government healthcare costs by $600 billion over a decade, $250 billion more than Obama proposed in his opening bid last week.

It would slow the growth of cost-of-living increases on federal benefits by $200 billion by changing the way they are calculated and cut other government spending by $600 billion.

Using the White House's accounting methods, the Republican proposal would reduce annual budget deficits by $4.6 trillion over 10 years, within shouting distance of the $4.36 trillion in savings proposed by Obama.

But the relative similarity of the headline number masks stark differences in how those savings would be achieved.

Editor's Note The IRS’ Worst Nightmare — How to Pay Zero Taxes

MUTUAL DISTRUST

The cuts proposed by Republicans are sure to face fierce resistance from Democrats, who are still smarting over $1.1 trillion in cuts that Republicans extracted in a budget deal last year.

And Obama has insisted that he will not sign any deal that does not raise taxes on the wealthiest households -- a step Republicans have resisted so far, even as they expressed a new willingness to reconsider the anti-tax stance that has defined the party for decades.

Negotiators must overcome more than just mutual distrust as they work toward a deal in coming weeks. While some business leaders and grassroots groups are urging Washington to craft a "grand bargain" that would put federal finances on a sustainable course, lawmakers also face a more immediate lobbying blitz from groups that worry that any deal could decimate favored federal programs.

Anti-tax activist Grover Norquist has been in the spotlight as he pressures Republicans to stick by a pledge many have signed to oppose any tax increases.

On the other side of the ledger, industry groups are scrambling to protect spending on everything from education to defense and scientific research. Liberal groups have mobilized to protect popular federal health and retirement programs.

"Everyone wants something to happen before the end of the year, but what's more important than having something happen is having the right thing happen," said Nancy Altman, co-director of Social Security Works, a coalition of liberal and labor groups.

"A bad deal is worse than no deal at all," she said.

Editor's Note The IRS’ Worst Nightmare — How to Pay Zero Taxes

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