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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