White House press secretary Jay Carney on Monday morning prodded House Republicans to present their own fiscal cliff proposal after spurring Barack Obama???s $1.6 trillion tax hike offer — a proposal that took a “balanced approach” between taxes hikes and populist rhetoric. ???If they have ideas that are different from ours … we can’t guess what they are,??? Carney said. ???They have to tell us.???
By Monday afternoon, Republicans complied, offering what they say is a more reasonable path forward than the Obama administration’s tax-heavy offer. The $2.2 trillion proposal, based on suggestions Erskine Bowles made to the Joint Select Committee on Deficit Reduction (Update: This comes as a surprise to Bowles), is mix of cuts and new revenue. The broad outline of the plan looks like this:
- $800 billion in new revenue from tax reform (likely through closing or capping certain deductions and base broadening.)
- $600 billion in health care cuts through Medicare and Medicaid.
- $300 billion in cuts to discretionary spending. ($200 billion from revisions to the consumer price index, used to set government salaries and benefits .)
- $300 billion from mandatory spending.
- Does not raise the rate on the highest income earners (something the White House has claimed is a prerequisite for any deal.)
- Does not take the debt ceiling off the table.
- Does not give the president another ???stimulus??? plan.
- Does not tackle payroll tax or unemployment insurance.
???The House Republican leadership put forward a Bowles framework that, unlike the unserious bait-and-switch proposal the President floated last week, is ground from which to build toward significant deficit reduction while beginning to reform and strengthen our entitlement programs???without harming jobs and economic growth,” said House Speaker John Boehner.
Here’s a refresher on the Obama offer:
- $1.6 trillion in new taxes
- Extension of the Social Security payroll tax break and unemployment insurance benefits.
- $3 in new taxes for every $1 in maybe cuts
- One-year deferral of “sequestration”
- $50 billion “stimulus” package.
- A refinancing of underwater mortgages.
- President is given authority over debt ceiling.