Plan isn’t balanced, Obama’s side says
included contentious changes to Medicare and Medicaid and deep domestic spending reductions.
“Mindful of the status quo election and past exchanges on these questions, 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 in the near term,” Republican leaders wrote in a letter to Obama.
The president’s offer, forwarded to congressional leaders by Treasury Secretary Timothy Geithner last week, stuck almost word for word to the budget proposal the Obama administration released nearly a year ago. Monday’s Republican counterproposal was close to what House Speaker John Boehner offered during private talks with Obama last year.
But Monday’s offer did bring some Republican concessions. Senior Republican leadership aides said the $800 billion in new revenue would come from increases in tax revenue, not from increased economic growth, as Republican leaders have often suggested since the number emerged from the Boehner-Obama talks. But the plan would rely primarily on cutting loopholes and deductions while extending the expiring Bush-era tax cuts for high-income Ameri- cans, something the president has said he would not agree to.
The offer itself — in a letter signed by the Republican House leadership — means that both sides have now put their opening bids on the table.
Republican leaders last week loudly rejected the Obama administration’s proposal and said they would not counter until the president came back with a plan they considered more realistic, not the one that Boehner again dismissed Monday as a “La-La-Land offer.” But facing increasing political pressure to produce an alternative, they acted Monday.
“What we are putting forth is a credible plan that deserves serious consideration from the White House,” Boehner said.
The White House was critical of the proposal.
“The Republican letter released today does not meet the test of balance,” said Obama spokesman Daniel Pfeiffer. “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.”
Of the plan’s savings, $200 billion over 10 years would come from changing the way the government calculates inflation, which would slow benefit increases in programs from Medicare to Social Security and raise taxes by slowing the annual rise in tax brackets. Republican aides said that it will be unpopular, but that it is the right response to deficits still topping $1 trillion.
The Republican plan also called for $600 billion in cuts to federal health care programs, including an increase in the eligibility age for Medicare and increased means testing to shrink health benefits for more