House GOP offer plan to avoid fiscal cliff
The GOP leaders proposed raising the new revenue by closing loopholes through tax reform and by cutting tax rates, a counter to President Barack Obama's proposal to raise rates on the wealthy.
The plan, contained in a three-page letter signed by seven House Republican leaders, is a counteroffer to last week's Obama administration proposal to raise twice as much from revenue. The letter is aimed at getting talks between the two sides, which have been at an impasse for days, moving again.
The Republican offer is a framework for deficit reduction and provided few specifics. It would save an estimated $2.2 trillion over 10 years, including $1.2 trillion from spending and another $200 billion from changes in cost-of-living formulas for a wide variety of federal programs.
No money is included for economic stimulus; the Obama plan sought $50 billion in one year. Nor is any mention made about increasing the nation's debt limit. The White House is seeking to create an easier way to approve increases.
The Republican proposal includes several items that have been discussed for the past year and a half. It quotes extensively from November 2011 testimony from Erskine Bowles, co-chairman of the independent commission that in 2010 recommended ways to trim deficits.
House Speaker John Boehner (R-Ohio) argued Monday that the White House offer "couldn't pass the House and couldn't pass the Senate." The $800 billion in revenue, which Republicans contend is a significant concession, would not be achieved through higher tax rates, "which we continue to oppose and will not agree to in order to protect small businesses and our economy," the Republicans' letter said.
"Instead, new revenue would be generated through pro-growth tax reform that closes special interest loopholes and deductions while lowering rates," they argued.
The plan also envisions $300 billion in savings on discretionary programs, or spending that Congress and the White House can more easily control. Such programs usually include education, housing, transportation and other items.
Another $900 billion would come from so-called mandatory programs and health care, presumably Medicare, Medicaid and other programs where spending is often subject to automatic formulas.
Obama ignored reporters' shouted questions about his reaction to the Republican plan, as he concluded remarks with Prime Minister Boiko Borissov of Bulgaria Monday.