News Column

White House: GOP Plan Cuts Rich Tax Rates

December 4, 2012
White House

A House "fiscal cliff" bid lowers tax rates for the rich, the White House said in rejecting it as U.S. President Obama was to urge governors to adopt his ideas.

"The Republican letter ... 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," White House Communications Director Dan Pfeiffer said in a statement after House Speaker John Boehner, R-Ohio, and other House Republicans including Budget Committee Chairman Paul Ryan, R-Wis., submitted a counter-proposal for avoiding the fiscal cliff's $500 billion in tax increases and spending cuts due to take effect after the New Year, which comes in 27 days.

Obama and Senate Democrats have said without a deal to raise tax rates on the wealthiest Americans there is no path forward to avert the cliff.

Monday's proposal would make $600 billion in cuts in Medicare and other health programs over 10 years, compared with Obama's $350 billion proposal.

It would also slow the growth of Social Security benefits and make contentious changes to Medicare and Medicaid. In addition, it said $800 billion in revenue could be raised without raising tax rates, but by closing loopholes and deductions in a broad tax-code rewrite.

"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," Pfeiffer said.

Boehner called his plan "credible" and said it deserved "serious consideration by the White House."

The GOP offer is in response to a White House plan presented to congressional leaders by Treasury Secretary Timothy Geithner last week. GOP leaders dismissed that plan, saying they would not take seriously a plan that includes $1.6 trillion in new tax revenue without comparable spending cuts or entitlement changes.

The Republicans said their counter-proposal was based on a framework outlined last year by former Clinton White House Chief of Staff Erskine Bowles, who co-chaired Obama's debt commission.

Bowles immediately distanced himself from the Republican proposal.

"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," Bowles said in a statement.

"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," Bowles' statement said.

Officials said Obama and congressional leaders could meet by the end of this week. Their last meeting was nearly three weeks ago.

Obama and Vice President Joe Biden were to meet with a bipartisan group of state governors at the White House at 10:10 a.m. "to discuss the actions we need to take to keep our economy growing and find a balanced approach to reduce our deficit," the White House said Monday night.

The unidentified governors -- reported by Politico to be the National Governors Association's executive committee -- were to meet with Boehner in the afternoon, Boehner's office said.

The executive committee, led by Delaware's Democratic Gov. Jack Markell and Oklahoma's Republican Gov. Mary Fallin, includes Democrats Mike Beebe of Arkansas, John Hickenlooper of Colorado and Mark Dayton of Minnesota, and Republicans Dave Heineman of Nebraska, Chris Christie of New Jersey, Gary Herbert of Utah and Scott Walker of Wisconsin.

The NGA requested the meeting, Politico said.

"I think that governors have a lot at stake in this process," White House spokesman Jay Carney said. "They have an interest in seeing Washington get its fiscal house in order. They have an interest in seeing Washington take action to ensure that the economy continues to grow. I think governors, broadly speaking, have a keen interest in, for example, Washington making wise investments in rebuilding our infrastructure. They obviously have a stake in our healthcare entitlement programs, including, of course, Medicaid.

"And what governors have in common with the president of the United States is that they're chief executives," Carney said. "They understand -- they run things and they're very practical and pragmatic about it, by and large. That's sometimes a distinction between governors and lawmakers on Capitol Hill."

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Source: Copyright United Press International 2012

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