GOP issues a fiscal cliff counteroffer to Obama

Andrew Taylor / The Associated Press /


Published Dec 4, 2012 at 04:00AM / Updated Nov 19, 2013 at 12:31AM

House Republicans put forth a $2.2 trillion “fiscal cliff” counteroffer to President Barack Obama Monday, calling for raising the eligibility age for Medicare, lowering cost-of-living hikes for Social Security benefits and bringing in $800 billion in higher tax revenue — but not raising rates for the wealthy.

The White House declared the Republicans still weren’t ready to “get serious” and again vowed tax rate increases will be in any measure Obama signs to prevent the government from the cliff’s automatic tax hikes and sharp spending cuts. Administration officials also hardened their insistence that Obama is willing to take the nation over the cliff rather than give in to Republicans and extend the tax cuts for upper-income earners.

With the clock ticking toward the year-end deadline, House Speaker John Boehner, R-Ohio, and other Republicans said they were proposing a “reasonable solution” for negotiations that Boehner says have been going nowhere. Monday’s proposal came 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.

Though the GOP plan proposes to raise $800 billion in higher tax revenue over the same 10 years, 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 that a “credible plan” and said he hoped the administration would “respond in a timely and responsible way.” The offer came after the administration urged Republicans to detail their proposal to cut popular benefit programs like Medicare, Social Security and Medicaid.

The White House complained the latest offer was still short on details about what loopholes would be closed or deductions eliminated, and it insisted that any compromise include higher tax rates for upper-income earners.

Asked directly whether the country would go over the cliff unless GOP lawmakers backed down, administration officials said yes. Officials said they remained hopeful that scenario could be avoided, saying the president continues to believe that going over the cliff would be damaging to the economy. And they signaled that Obama wouldn’t insist on bringing the top tax rate all the way back to the 39.6 percent rates of the Clinton era. The officials spoke on condition of anonymity because they were not authorized to speak publicly about internal White House deliberations.

“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,” White House Communications Director Dan Pfeiffer said in a statement.

Boehner saw the situation as just the reverse.

“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 said Monday.

The GOP proposal itself 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.