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Boehner offers fiscal cliff proposal

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By The Associated Press
Monday, Dec. 3, 2012, 8:08 p.m.
 

WASHINGTON — House Republicans on Monday proposed a 10-year, $2.2 trillion blueprint to President Obama that calls for raising the eligibility age for Medicare and lowering cost-of-living hikes for Social Security benefits, a counteroffer to jump-start stalled talks with the “fiscal cliff” just weeks away.

The proposal from House Speaker John Boehner, R-Ohio, and other Republicans was made in response to Obama's plan last week to raise taxes by $1.6 trillion over the coming decade but largely exempt Medicare and Social Security from budget cuts.

The GOP plan proposes to raise $800 billion in higher tax revenue over the decade but it would keep the Bush-era tax cuts — including those for wealthier earners targeted by Obama — in place for now.

Dismissing the idea of raising any tax rates, the Republicans said the new revenue would come from closing loopholes and deductions while lowering rates.

Boehner called the GOP proposal a “credible plan” and said he hopes the administration will “respond in a timely and responsible way.” The offer comes after the administration urged Republicans to detail their proposal to cut popular benefit programs like Medicare, Social Security and Medicaid.

Obama did not respond to questions from reporters on his reaction to the Republican counteroffer or whether he had seen the proposal. He was asked about it during an event in the Oval Office with the Bulgarian prime minister.

The Boehner proposal revives a host of ideas from failed talks with Obama in the summer of 2011. Then, Obama was willing to discuss politically risky ideas such as raising the eligibility age for Medicare, implementing a new inflation adjustment for Social Security cost-of-living adjustments and requiring wealthier Medicare recipients to pay more for their benefits.

The latest Republican plan contains few specifics and anticipates that myriad details will have to be filled in next year in legislation overhauling the tax code and curbing the growth of benefit programs.

By GOP math, their plan would produce $2.2 trillion in budget savings during the coming decade: $800 billion in higher taxes, $600 billion in savings from costly health care programs like Medicare, $300 billion from other proposals such as forcing federal workers to contribute more toward their pensions and $300 billion in additional savings from the Pentagon budget and domestic programs funded by Congress each year.

Boehner signaled in discussions with Obama in 2011 that he was willing to accept up to $800 billion in higher tax revenues, but his aides maintained that much of that money would have come from so-called dynamic scoring — a conservative approach in which economic growth would have accounted for much of the revenue. Now, Boehner is willing to accept the estimates of official scorekeepers such as the Congressional Budget Office, whose models reject dynamic scoring.

Under the administration's math, GOP aides said, the plan represents $4.6 trillion in 10-year savings. That estimate accounts for earlier cuts enacted during last year's showdown over lifting the government's borrowing cap and factors in war savings and lower interest payments on the $16.4 trillion national debt.

Last week, the White House delivered to Capitol Hill its opening proposal: $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit.

In exchange, the president would back $600 billion in spending cuts, including $350 billion from Medicare and other health programs. But he wants $200 billion in new spending for jobless benefits, public works projects and aid for struggling homeowners. His proposal for raising the ceiling on government borrowing would make it virtually impossible for Congress to block him going forward.

The GOP plan is certain to whip up opposition from Democrats opposed to any action now on Social Security, whose defenders say should not be part of any fiscal cliff deal. And Democrats also are deeply skeptical of raising the Medicare age.

 

 
 


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