Boehner: Lower tax rate for rich, cut Medicare

First, here’s GOP House Speaker Boehner’s letter to President Obama.

Here’s how National Journal describes the proposal:

Boehner’s counter, based on a proposal that former Clinton administration official Erskine Bowles made before the super committee last year, attempts to use a top Democrat’s framework to yank the negotiations rightward and take the rhetorical high ground.

In addition to the $800 billion in revenue, Boehner’s counteroffer calls for $1.4 trillion in savings, including $600 billion in changes to health programs like Medicare and Medicaid; $300 billion in cuts to mandatory programs; $200 billion in revisions to the way the consumer price index is used by the federal government to set salaries and benefits; and $300 billion in further discretionary spending cuts. And, if measured by the same standards as Obama’s plan, Boehner’s counter would provide $4.6 trillion in deficit reduction, more than the $4 trillion offered by Obama, Republican aides say.

It does not, however, outline how to deal with a country fast approaching its debt limit or sequestration’s across-the-board spending cuts.

Some in town are calling it the worst of the Ryan budget plus the Romney tax plan.

As for Boehner calling this Bowles’ plan, Bowles is saying nuh-uh:

Erskine Bowles

Erskine Bowles

Bowles Statement on Speaker Boehner’s Letter to the President

While I’m flattered the Speaker would call something “the Bowles plan,” the approach outlined in the letter Speaker Boehner sent to the President does not represent the Simpson-Bowles plan, nor is it the Bowles plan. In my testimony before the Joint Select Committee on Deficit Reduction, I simply took the mid-point of the public offers put forward during the negotiations to demonstrate where I thought a deal could be reached at that time.

The Joint Select Committee failed to reach a deal, and circumstances have changed since then. It is up to negotiators to figure out where the middle ground is today. Every offer put forward brings us closer to a deal, but to reach an agreement, it will be necessary for both sides to move beyond their opening positions and reach agreement on a comprehensive plan which avoids the fiscal cliff and puts the debt on a clear downward path relative to the economy.

And the White House isn’t thrilled either:

Dan PfeifferStatement from White House Communications Director Dan Pfeiffer:

“The Republican letter released today does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill. 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. Independent analysts who have looked at plans like this one have concluded that middle class taxes will have to go up to pay for lower rates for millionaires and billionaires. While the President is willing to compromise to get a significant, balanced deal and believes that compromise is readily available to Congress, he is not willing to compromise on the principles of fairness and balance that include asking the wealthiest to pay higher rates. President Obama believes – and the American people agree – that the economy works best when it is grown from the middle out, not from the top down. 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 our nation needs.”

Steve Benen digests the plan further:

John Boehner

John Boehner

So, what’s the pitch? Under this proposal, Republicans would keep all of the Bush-era tax rates, but accept $800 billion in new revenue. How? Through “through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.”

From there, the GOP leaders want to cut $600 billion from Medicare and Medicaid; cut $300 billion from mandatory programs; cut $200 billion by changing the consumer price index; and then cut another $300 billion in further discretionary spending.

To call this a “counteroffer” is to strip the word of meaning. Under the GOP plan, Republicans get the more than $1 trillion in spending cuts Obama already gave them; Republicans get the entitlement cuts they want; Republicans get hundreds of billions of dollars in additional cuts to programs they haven’t identified; and Republicans get all of the Bush-era tax rates they’ve prioritized.

This isn’t a “counteroffer”; it’s a Christmas wish list written by kids without access to calculator.

Boehner has now responded to Pfeiffer:

“Republicans have once again offered a responsible, balanced plan to avoid the fiscal cliff, and the White House has once again demonstrated how unreasonable it has become,” Boehner’s spokesman Brendan Buck said in a statement emailed to TPM. “If the President is rejecting this middle ground offer, it is now his obligation to present a plan that can pass both chambers of Congress.”

A wee bit of a logical fallacy there from Boehner: It’s not the President’s job to send Boehner the plan that the Republicans want, that’s not the way negotiations work. That’s the old Obama. He started fading out two years, and if there were any doubt as to his lingering presence, it seems pretty much gone now.

As for Boehner asking the President to present a proposal that can pass, well, including tax increases in the legislation is wildly popular with the American people.  So that’s a proposal that can pass, but only if the Republicans stop acting bat-s crazy.

Not to mention, it’s a dangerous notion for Boehner to talk about legislation that can pass.  Because one thing that can pass if the bill that already passed the Senate, extending the middle class tax cuts. Even some Republicans agree that it’s the way to go:

Republican Rep. Tom Cole urged colleagues in a private session Tuesday to vote to extend the Bush tax rates for all but the highest earners before the end of the year — and to battle over the rest later.

The Oklahoma Republican said in an interview with POLITICO that he believes such a vote would not violate Grover Norquist’s anti-tax pledge and that he’s not alone within Republican circles.

And even conservative Republicans have said they think it would pass the House. From CNN:

In remarks at the White House, Obama urged Americans to call, e-mail and tweet their members of Congress to urge immediate passage of his proposal to extend tax cuts for most Americans while allowing rates on the wealthiest 2% to increase to 1990s levels.

House Speaker John Boehner immediately shot down the call by veteran Rep. Tom Cole of Oklahoma for the chamber to approve the Senate measure, saying he disagreed with his colleague. House GOP aides insisted there was no plan to bring the proposal up for a vote.

However, the public call by Cole — which echoed similar statements from conservatives in recent weeks — as well as his prediction that the Senate proposal would pass in the House showed an increasing desire among House Republicans to move beyond an issue that has harmed them.

Conservative Rep. Tim Scott of South Carolina also said he thought the Obama tax plan would pass the House, though he made clear to CNN he would oppose it.

Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Instagram | Google+ | LinkedIn. John Aravosis is the Executive Editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown; and has worked in the US Senate, World Bank, Children's Defense Fund, the United Nations Development Programme, and as a stringer for the Economist. He is a frequent TV pundit, having appeared on the O'Reilly Factor, Hardball, World News Tonight, Nightline, AM Joy & Reliable Sources, among others. John lives in Washington, DC. .

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  • He ha

    Its about time we pull all the men and aid from foreign soil and use the money here in the USA and let all the politicians pay into SS and Medicare just like the rest of us. if they could live like a average everyday person mabe they would change there tone. They cant even agree to help the people in our country after Sandy. Come on Govt. wake the F- – – Up

  • htfd

    To answer your question: hasn’t the White House Learned anything…NO. As a Democrat that can’t stand most of the Democrats voters for being stupid and afraid of their own shadow and gullible enough to tolerate the ‘fiscal cliff’ BS, which is similar to the debt crisis and the scam mortgage settlement deals the White House cooked up. They never held Obama’s or any other Democrat politician’s feet to the issue fires before the election.

    We, the poor and the newly poor went over the cliff about 4 years ago because we needed a leader like LBJ / FDR and got a Nixon / Hover instead. Now it is going to be 10 times as hard to correct the issues of tax breaks, indefinite detention, kill lists, drone murders and the ever increasing war on terror against us, the American populous. Forget Obama’s drama and let all the tax breaks end…the ones Bush put in place and the Obama payroll cuts which are bleeding Social Security and Medicare, Medicaid and actually giving large tax breaks to Corporations and dimes to the workers.

    The rhetoric of it costing the Middle Class about $2000 a year if an agreement isn’t made to accept the Obama’s plan of tax breaks for the quarter of million and under, what Middle Class person, working 9 to 5 is making about $5000 a week? It will mean an increase of about $5.50 a week. $5.50 less to spend on foreign made junk bought from Wal-Mart that is thrown out in less than a month and is making this country the largest trash heap on earth. Think about land fill capacity soon to be the next crisis we need to face.

    It’s time to face facts and bit the bullet. End the tax breaks.

    It’s not the government that is so rotten, it’s the people that we elect to represent us and run the government that are rotten to the core.

  • condew

    This is the disaster that free trade made.

    Free trade means American labor is required to match the wages set by communist China. No-one can pay U.S. prices for health care, housing, or even just food and work for the wages a communist nation can impose. So gone are the jobs, vanishing is the middle class. Next to go is the social safety net.

    But guess what, Republicans; Without the tax-paying middle class you are destroying, we also can’t afford the military and weapons you love so much, not even a fraction of it.

    And guess what rich people, without the middle class there is no market, there is no economy where you can get richer year after year by siphoning off a little of the nation’s wealth in every transaction.

  • condew

    Just like before, I believe under Regan, we’ll simplify the tax code this year by cutting all the deductions and lowering the rate, and then next year we’ll put all the deductions back and continue to explode the deficit.

  • Butch1

    It wouldn’t hurt my feelings.

  • condew

    Republicans want Obama to propose specific cuts because they know the glittering generality “cut government spending” is popular, but each specific cut will be political suicide. The moment Democrats get specific, Republicans will have all the political ad fodder they need to win in 2016. I’m sure glad Obama is finally playing political hardball.

  • Powkat

    Keep pushing, Mr. President. The great orange one is fucking desperate, but it’s not 2011 and there is no Grand Bargain to be had. Get your parachutes and popcorn, we’re going over.

  • Ninong

    Put the pedal to the metal, Louise; we’re going off the cliff.

  • Naja pallida

    I’ve been saying this since the day he couldn’t even manage to organize his own party to complete a reading of the Constitution without fucking it up… and that was his first day. It’s been all down hill since then.

  • oh, and if seniors on Medicare, and disabled persons on Medicaid, can’t get adequate service NOW without paying out of pocket for “Supplemental Insurance” then what right-minded (as opposed to right wing) person could possibly think that CUTTING those services will benefit anyone?

  • Republicans want to cut “tax loopholes” to generate revenue? Hah! Republicans have never met a loophole they didn’t like, especially if they benefit the wealthy and corporations! I’m sure their idea of “loopholes” to cut would be critical things like the Earned Income Credit (EIC) and deductions that lower income citizens currently can take advantage of. The real loopholes, like the ridiculous Capital Gains Tax that lets slackers like Romney pay such low tax rates, will NEVER be touched!

  • John Boehner is quite possibly the most inept and incompetent of House Speakers—-ever. What a putz!

  • Love it.

  • A reader in Colorado

    Let the tax cuts for the rich expire, and then ask for MORE.

    It’s time to drive the Republicans mad.

  • Initial observation: The GOP/Ryan counter includes the exact frickin’ same $600b cut in Medicare/Medicaid spending they said during the campaign was Obama stealing from Gramma’s medical care. Hypocrisy much?

    As my friend Reader in Colorado notes below, we’ve already had more than a decade of lowered tax rates on the wealthy. So where are the jobs they promised, the growth and increased wages? Why are we now in a Demand Depression? Oh yeah — it was because like all things Republican, they believe that wars cost nothing, tax cuts result in increased revenues, and best way to deal with an unsustainable (and patently illegal) real estate bubble was to ignore it until it exploded and wiped out trillions of dollars in American citizens’ equity savings.

    Once again, the GOP proposal is to reduce tax rates — a tangible number — in exchange for closing unspecified ‘loopholes and deductions.’ Yeah, well, I remember the first time I experienced that particular scam. When I first entered the job market in the mid 80s, earning a modest but decent post-college income, I remember when credit card and personal loan interest was deductible. Reagan took that. I also remember that I used to hit the payroll tax cap and would see a small bump in my bi-weekly salary check starting around September. He took that, too.

    The only way you get to $800b in revenue increases over and above the loss in revenues from lower marginal rates for high income earners would be to wipe out nearly everything — no more mortgage interest deduction, no more deductibility of state and local taxes, no more earned income tax credit, no more tax-free health insurance premiums, and so on.

    It’s clear to me the GOP plan is nothing but “do what we say, or the country gets it.”

  • A_nonymoose

    The only spin that matters is that of the Republican party, as it flushes itself down the toilet.

  • Butch1

    When is he going to face reality that his side lost the election? They act like they won. Go ahead an let the Bush tax cuts expire. I wish they would. It’s going to be the only way we are really going to get a tax on the top rich in this country.

  • A reader in Colorado

    Yes, because everyone knows including President Obama, that minorities are supposed to get most of what they want.

    And Dan Pfeiffer’s pablum is exactly what I’m talking about in terms of insipid. I’ll attempt a rewrite:

    In their zeal and determination to strip America bare in her hour of need, Republicans have offered yet another proposal that ducks personal responsibility for the well to do. Arrogantly presuming that wealthy people wish to turn their backs on America, presuming on their behalf, they have offered again to shield the richest people in America for paying the patriotic price for ten years of a war started by and justified by Republican lying and not accounting for more than a decade of wars of arguable necessity.

    Rather than create jobs, Republicans have offered to break the bank and loot the government on the presumption that the rich might someday create enough jobs to lift us out of ten years of a demand depression caused by a carefree lackadaisical refusal to pay for the consequences they themselves set in motion, And now they want more indulgence for the wealthy, rather than paying for the party they started.

    Well, where are the jobs? The tax cuts have been given. Where are the jobs?

    They wish to destroy the U.S. government based on the vague promise that people who make more in one year than most people make in a lifetime will at some time create jobs, only if their taxes are low enough. Well, taxes have been lowered and lowered, ever and ever. Where then are the jobs?

    The wealthiest people in America got a massive tax cut during a time of war, and have gotten wealthier because of it. Where is their patriotism? Democrats assume it is there, that the wealthy would pay if asked. Republicans don’t want to even ask the wealthy to pay for the party, the benevolence and opportunity of America, based on the assumption they wouldn’t, even if asked.

    For the elderly, what the Republicans are offering is hardship. This without asking for any sacrifice from the people who spent the money on war, and war industries.

    But America needs jobs now. It’s time to put America back to work, and for the middle class and working poor have access to work and the money to pay for things. They have had their sacrifice. The middle class, elderly and poor have already had, have already paid their sacrifice in the form of a decade of unnecessary poverty caused by the greed and hubris of banks, the asking of no responsibility on the part of the wealthy, and assuming war costs nothing on the part of Republicans and some of their Democratic co-conspirators.

    Now it’s time that people from which nothing has been asked except to voluntarily operate in good faith and help the American people lift themselves out of poverty, now should actually pay to do so in law. That what they have already said they would do, they now be officially asked to do.

    To ask the wealthiest and most blessed of America’s upper class to make a very small thank you for that benevolence is not too much to ask. To complain about a pittance to help their fellow citizen after a decade of malfeasance, corruption and war, not to great a price. After all is said and done, America’s wealthiest will still have their homes, their jets and their golf courses. It’s not too great a price, after all that benevolence to ask America’s wealthiest, and the Republicans, to help make America a land of opportunity again.

  • Naja pallida

    Presented with a fiscal cliff, Republicans propose cliff diving as a solution.

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