WASHINGTON — Republican congressional leaders Monday countered President Barack Obama’s deficit reduction proposal with a plan of their own that is far heavier on spending cuts but that embraces $800 billion in new taxes over the next 10 years.
The counteroffer represented an acknowledgment by Republicans that they had to issue their own proposal to head off around $600 billion in automatic tax increases and spending cuts next year, a fiscal combination that could send the economy back into recession. They said that their approach was a move toward the center rather than sticking to a position established last year with the passage of the House Republican budget, which included contentious changes to Medicare and Medicaid and deep domestic spending reductions.
“Mindful of the status quo election and past exchanges on these questions, we recognize it would be counterproductive to publicly or privately propose entitlement reforms that you and the leaders of your party appear unwilling to support in the near term,” Republican leaders wrote in a letter to Obama.
The president’s offer, forwarded to congressional leaders by Treasury Secretary Timothy Geithner last week, stuck almost word for word with the budget proposal the Obama administration released nearly a year ago. Monday’s Republican offer on taxes was close to what Speaker John Boehner offered during private talks with Obama last year.
But Monday’s offer did bring some Republican concessions. Senior Republican leadership aides said the $800 billion in new revenue would come from increases in tax revenue, not from increased economic growth, as Republican leaders have often suggested since the number emerged from the Boehner-Obama talks. But the plan would extend the expiring Bush-era tax cuts for high-income Americans, something the president has said he would not agree to.
The offer itself — in a letter signed by the Republican House leadership, including Rep. Paul Ryan, the former vice-presidential nominee — means that both sides have now put their opening bids on the table. Republican leaders last week loudly rejected the Obama administration’s offer and said they would not counter until the president came back with a plan they considered more realistic, not the one that Boehner again dismissed Monday as a “La-La-Land offer.”
But facing increasing political pressure to produce an alternative, Republicans acted Monday.
“What we are putting forth is a credible plan that deserves serious consideration from the White House,” Boehner said.