John Boehner (Alex Wong/Getty Images)
WASHINGTON - House Republicans sent a counterproposal to avert the "fiscal cliff" to the White House today outlining a $4.6 trillion deficit reduction proposal without raising tax rates on the wealthiest Americans.
The proposal is based on a framework outlined last year by former Clinton White House chief of staff Erskine Bowles, who co-chaired President Obama's debt commission, and included an increase in the eligibility age for Medicare benefits. Republicans did not offer specific language on raising the age in their proposal today, but Bowles has publicly supported raising the age to 67.
Obama and House Speaker John Boehner, R-Ohio, also discussed raising the Medicare age to 67 over a 50-year period during their unsuccessful 2011 talks on deficit reduction.
"What we're putting forth is a credible plan that deserves serious consideration by the White House and I would hope that they would respond in a timely and responsible way," Boehner told reporters.
The GOP offer is in response to a White House plan presented to congressional leaders last week by Treasury Secretary Timothy Geithner, which was dismissed by GOP leaders who said its $1.6 trillion request for new tax revenues without comparable spending cuts or entitlement reforms was an unserious proposal. Today Boehner called it a "la-la land offer."
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The House received a similar reception Monday from White House communications director Dan Pfeiffer, who said the Republican plan "does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill. 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. Independent analysts who have looked at plans like this one have concluded that middle class taxes will have to go up to pay for lower rates for millionaires and billionaires."
Obama and Senate Democrats have said that without an agreement to raise tax rates on the wealthiest of Americans there is no path forward to avert the "fiscal cliff" at the end of the year when George W. Bush-era tax rates expire and $1.2 trillion in spending cuts over 10 years is triggered.
The House Republicans' proposal was short on specifics but calls for $800 billion in new revenue achieved through closing loopholes and capping deductions; $900 billion in health care and other mandatory spending cuts; $300 billion in spending cuts for discretionary spending, which includes social programs such as food stamps; and $200 billion gained by changing the way the government calculates cost-of-living adjustments for Social Security and Medicare.
The GOP plan achieves enough in deficit reduction to turn off the $1.2 trillion automatic spending cuts at the end of the year to resolve that component of the "fiscal cliff," two senior GOP congressional aides said. They spoke anonymously because they weren't authorized to speak publicly about the details of the proposal.
The GOP plan does not include any proposal on how to raise the debt ceiling, which is another non-starter for the White House which wants to use the fiscal cliff negotiations to include an agreement to raise the debt ceiling in February when the U.S. is expected to hit its $16.4 trillion borrowing limit. The president wants to avoid another debt limit fight with congressional Republicans that rattled Wall Street in the summer of 2011 and led bond-rating houses to lower the federal government's credit rating.
Boehner will attend a holiday reception at the White House tonight. Asked if he would discuss his proposal with the president he quipped: "I might run in to him."