House Speaker John A. Boehner (R-Ohio) and his GOP leadership team sent the White House the three-page offer Monday afternoon as the administration turned up the volume on their complaints that Republicans have been unwilling to put a serious proposal on the table.
Noticeably missing from the counteroffer, which was also signed by Rep. Paul D. Ryan (R-Wis.) who had been Republican Mitt Romney’s vice-presidential running mate, was Ryan’s House-passed budget proposals for turning Medicare into a voucher-like program for the next generation of seniors.
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“We recognize it would be counterproductive to publicly or privately propose entitlement reforms that you and the leaders of your party appear unwilling to support inn the near-term,” the letter said.
The Republican offer comes as talks to avert the year-end budget crisis that economists warn could derail the economy had hit a stalemate. Existing tax rates will increase Jan. 1, rising about $2,200 on average Americans in the new year, if nothing is done. Enormous budget cuts are scheduled days later, a one-two punch of economic contraction.
Obama has been fighting to preserve the lower tax rates for all but the wealthiest households, those earning more than $250,000 for couples and $200,000 for singles. The president has said the nation can no longer afford tax breaks for the wealthy that would cost about $900 billion over the decade. But Republicans are fighting to keep the tax breaks for all.
Monday, Republicans proposed capturing nearly the same amount of revenue by closing loopholes and limiting itemized deductions on the wealthiest households, while also launching a broader tax-reform process that would lower all tax rates.
Boehner and his team also proposed $1.4 trillion in savings from spending cuts — including healthcare reforms that could include raising the Medicare retirement age and asking wealthier seniors to pay higher Medicare premiums. They also proposed limiting the cost-of-living adjustments for Social Security recipients and others.
Cuts to the entitlement programs have long been discussed as part of a broad deficit-reduction deal, but they are politically unpleasant. By refusing to consider such changes, Democrats forced Republicans to put them on the table.
The Republican proposal is silent on issues Obama had proposed in his offer last week, including a continuation of the payroll tax break and long-term unemployment benefits.
Details of the proposal remain to be worked out, but Republicans suggested a two-part framework, with some of the tax-and-spending changes happening this year and the rest being made in 2013.
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