Plan isn’t balanced, Obama’s side says

Deficit

Austin American-Statesman - - THE SECOND FRONT - A

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

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