WASHINGTON - House Republicans Monday put forth a $2.2 trillion "fiscal cliff" counteroffer to President Obama, calling for raising the eligibility age for Medicare, lowering cost-of-living hikes for Social Security benefits and bringing in $800 billion in higher tax revenue - but not raising rates for the wealthy. The White House declared that the Republicans still weren't ready to "get serious."
With the clock ticking toward the year-end deadline, House Speaker John Boehner, R-Ohio, and other Republicans said that they were proposing a "reasonable solution" for negotiations that Boehner says have been going nowhere. Monday's proposal came in response to Obama's plan last week to raise taxes by $1.6 trillion over the coming decade but to largely exempt Medicare and Social Security from budget cuts.
Though the GOP plan proposes to raise $800 billion in higher tax revenue over the same 10 years, it would keep the Bush-era tax cuts - including those for wealthier earners targeted by Obama - in place for now. Dismissing the idea of raising any tax rates, the Republicans said that the new revenue would come from closing loopholes and deductions while lowering rates.
GOP aides said their plan is based on one presented by businessman Erskine Bowles in testimony to a special deficit "supercommittee" last year - in effect a milder version of a 2010 Bowles proposal that caused both GOP and Democratic leaders in Congress to recoil.
Bowles, in a statement, said that he was flattered but that the GOP plan does not represent his proposal.
Boehner called that a "credible plan" and said he hoped that the administration would "respond in a timely and responsible way." The offer came after the administration urged Republicans to detail their proposal to cut popular benefit programs like Medicare, Social Security and Medicaid.
The White House complained that the latest offer was still short on details about what loopholes would be closed or deductions eliminated, and it insisted that any compromise include higher tax rates for upper-income earners.
"Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won't be able to achieve a significant, balanced approach to reduce our deficit," White House Communications Director Dan Pfeiffer said in a statement.
Boehner saw the situation as just the reverse.
"After the election, I offered to speed this up by putting revenue on the table, and, unfortunately, the White House responded with their la-la land offer that couldn't pass the House, couldn't pass the Senate and it was basically the president's budget from last February," he said Monday.
The GOP proposal itself revives a host of ideas from failed talks with Obama in the summer of 2011. Then, Obama was willing to discuss politically risky ideas such as raising the eligibility age for Medicare, implementing a new inflation adjustment for Social Security cost-of-living adjustments and requiring wealthier Medicare recipients to pay more for their benefits.
Monday's Republican plan contains few specifics and anticipates that myriad details will have to be filled in next year in legislation overhauling the tax code and curbing the growth of benefit programs.
Time is growing shorter before the deadline to avert the fiscal cliff, which is a combination of expiring Bush-era tax cuts and automatic, across-the-board spending cuts that are the result of prior failures of Congress and Obama to make a budget deal.
Many economists say such a one-two punch could send the fragile economy back into recession.