WASHINGTON — Right back at you, Mr. President.
House Republicans yesterday shot back a $2.2 trillion counteroffer to President Obama in high-stakes haggling to avoid the so-called fiscal cliff.
Republicans offered up $800 billion in new tax revenue and $1.4 trillion in spending cuts to stave off the fiscal cliff, which threatens to wreck the economy with massive tax hikes for most Americans and deep spending cuts Jan. 1 unless Washington agrees to an alternative debt-cutting plan.
The GOP offer topped Obama’s $2 trillion opening bid.
But the Republicans relied heavily on spending cuts — especially to health-care programs and other entitlements, including Medicare and Social Security. Obama’s plan was dominated by $1.6 trillion of tax hikes on the rich.
Republicans squeezed $800 billion in new revenue out of closing loopholes and eliminating deductions for special interests, instead of raising tax rates, which they firmly oppose.
Their plan even lowered the top income-tax rate below the current 35 percent. Obama wants that rate to go up to 39.6 percent.
Obama has demanded higher taxes on the rich, by letting the Bush-era tax cuts expire for Americans earning over $250,000 a year.
If Democrats and Republicans can’t strike a deal, all the Bush tax cuts expire and middle-class Americans will suffer a $2,000 to $3,000 tax increase next year.
House Speaker John Boehner (R-Ohio), who last week rejected Obama’s plan as “not serious,” said that the GOP had ponied up a framework to find a “fair middle ground.”
“After the election I offered to speed this up by putting revenue on the table, and unfortunately the White House responded with their la-la-land offer that couldn’t pass the House, couldn’t pass the Senate, and it was basically the president’s budget from last February,” he told reporters at the Capitol.
“What we are putting forward is a credible plan that deserves serious consideration by the White House,” Boehner said.
The offer was outlined in a letter sent to Obama and signed by Boehner and six other House GOP leaders, including Budget Committee Chairman Paul Ryan (R-Wis.), who was Mitt Romney’s running mate for vice president.
The White House promptly threw it out, calling it “nothing new” with “no details.”
“It actually promises to lower rates for the wealthy and sticks the middle class with the bill,” White House spokesman Dan Pfeiffer blasted in a statement.
“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,” he said.
The Republicans also didn’t include an increase in the US debt ceiling. The president wants that included to avoid another debt showdown when the government maxes out its credit limit as soon as February.
Boehner released the GOP plan hours before he was expected to attend the White House holiday party, where he and the president had a chance to discuss it in person.
“I might run into him,” quipped the speaker.
Republicans boasted that their plan was based on testimony last year by Erskine Bowles, former chief of staff to President Bill Clinton and co-chairman of Obama’s debt commission.
Bowles said he was “flattered” that Boehner would give him credit but distanced himself from the plan.
“Every offer put forward brings us closer to a deal, but to reach an agreement, it will be necessary for both sides to move beyond their opening positions,” Bowles said in a statement.
Obama and Congress created the fiscal cliff as part of a budget deal in August 2011, when both sides rejected the debt commission recommendations and were unable to come up with an alternative plan to shrink the national debt — now more than $16 trillion.
Slash flood
Republican leaders in the House yesterday proposed $2.2 trillion in new deficit reduction over 10 years in their latest effort to avert an end-of-year fiscal cliff. The rough details of the GOP plan:
$800 billion in added tax revenue by closing loopholes and ending deductions for special interests
$600 billion in cuts to government health programs, including Medicare
$300 billion in cuts to mandatory spending, such as farm subsidies and welfare
$300 billion in cuts to agency budgets $200 billion by reducing amount of yearly inflation adjustments for government benefits, including Social Security
The proposal extends all the Bush-era tax cuts, including for wealthy Americans