Late Monday afternoon, House Speaker John Boehner announced he had sent a letter co-signed by several Republican leaders – including House Budget Committee chair and recent vice-presidential contender Paul Ryan – containing a counter-offer to avoid the “fiscal cliff.”
That term has become almost completely synonymous with “the expiration of the Bush tax rates,” rather than the actual yawning chasm of insolvency facing the federal government. Boehner’s counter-offer is more serious than President Obama’s laughable abdication of responsibility, a $1.6 trillion tax increase “offer” that was never meant to be anything but a political manuever. The Boehner plan gets serious in a couple of ways. It does include true reductions in the rate of spending increase – we’re not quite up to talking about much in the way of actual “cuts” yet – without double-counting all sorts of existing, planned adjustments like “war savings” from wars that were ending anyway, a favorite deception of the Democrats. And it doesn’t abolish the debt ceiling, or even include an increase in the current ceiling – that’s treated as a separate issue to be discussed later.
Boehner’s plan does include $800 billion in new revenue, which is half of what Obama is demanding, and roughly equal to the deal the President walked away from in 2011. This new revenue is supposed to come from tax reform, rather than rate increases. It’s all said to be patterned after proposals from Democrat Erskine Bowles, although it’s not taken from the Simpson-Bowles deficit reduction commission, which Obama convened, and then resolutely ignored.
Conservative veterans of the political battles of the 1990s may be surprised to discover that Erskine Bowles now leans from the starboard side of America’s ship of state, while serving as the intellectual godfather of Republican budget proposals. That’s what it looks like when an “Overton window” moves, folks.
The Hill lays out some details of the Republican proposal:
In addition to the $800 billion in revenue, the Republicans are proposing $600 billion in health savings, $300 billion in savings from other mandatory spending and $300 billion in further cuts to discretionary spending.
The GOP is also proposing to raise $200 billion through changes to the way inflation is calculated for the purpose of determining benefits and tax policy across a range of programs, including $200 billion. The offer is consistent with a framework that leaders in both parties have agreed to: averting the looming tax hikes and spending cuts with a ???down payment??? of deficit reduction while settling on targets for tax and entitlement reform in 2013.
The Republican proposal does not specify what would be immediately enacted as a down payment, and aides said it could replace the $1.2 trillion in automatic spending cuts that are set to begin taking effect next year, although it does not explicitly eliminate them.
While the offer only specifies targets for entitlement reform, aides said they would likely include means testing of Medicare and raising the age of eligibility, which they noted have been at the center of deficit reduction talks for years. ???It???s not as if we have had no conversations over the past few years,??? an aide said.
The thinking, presumably, is that if both sides can come together over something like this, the groundwork might be laid for productive future negotiations over the growth of entitlement programs, which might conceivably lead to the national debt growing at less than half its current speed, sometime in the future. Of course, that’s assuming this doesn’t all end with a 10-year spending cut deal that becomes completely meaningless in 2015. Meanwhile, completely absent from the discussion is any talk of pro-growth tax reduction, which Republicans are supposed to believe is a far better path to solvent government that squeezing a few more bucks out of rich people, through either rate increases or the elimination of deductions.