WASHINGTON Its directly opposed to the Obama administrations proposal which seeks to raise $1.6 trillion over 10 years, much of it from higher income-tax rates on the wealthy.
The Republican plan, contained in a three-page letter signed Monday by seven House Republican leaders, includes:
$1.2 trillion cut from projected spending over the coming decade.
$800 billion in new tax revenues.
$200 billion over 10 years 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 affluent seniors.
No money is included for economic stimulus; President Barack Obamas plan seeks $50 billion in one year. Nor is any mention made of increasing the nations debt limit.
Thats significant, because the White House is seeking an easier way to approve increases that allow new debt to be issued to cover existing obligations. The federal government is expected to start bumping up against the $16.3 trillion debt ceiling late this month, and extraordinary measures to move money around could buy another two months, three at most, before the United States defaults on some of the debt it owes, absent establishment of a new ceiling..
The White House panned the GOP proposal as unbalanced.
In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill, White House spokesman Dan Pfeiffer said in a statement. 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.
House Speaker John Boehner, R-Ohio, argued Monday that the White House offer couldnt pass the House and couldnt pass the Senate.
The $800 billion in tax revenue, which Republican leaders contend is a significant concession, would be generated through pro-growth tax reform that closes special interest loopholes and deductions while lowering rates, they argued.
The White Houses proposal seeks to raise $600 billion over a decade by eliminating tax deductions, and $960 billion over 10 years by raising marginal tax rates for the top 2 percent of income earners.
The $1.2 trillion in proposed spending cuts includes $300 billion in savings on discretionary programs, or spending that Congress and the White House can control more easily. Such programs usually include education, housing and transportation.