WASHINGTON—Fiscal negotiations in Washington moved forward Monday as Republicans offered a new proposal to avoid the so-called fiscal cliff. The White House dismissed the proposal as an unbalanced effort that would hurt the middle class.
The GOP plan included $800 billion in new government revenue by eliminating tax code write-offs while extending current tax rates for all income levels. President Barack Obama has insisted that tax rates for high earners must be hiked.
Republicans estimated they could save $300 billion by cutting discretionary spending, $600 billion in "health savings," $200 billion in changes to the consumer price index and another $300 billion in mandatory spending.
"This is another attempt to jump-start substantive, good-faith negotiations toward a bipartisan solution that can be enacted soon, a stark contrast to the unserious proposal the White House put forward last week," House Speaker John Boehner said in a statement accompanying the proposal's release.
Boehner based his proposal on a plan President Clinton's former chief of staff Erskine Bowles presented last year to the Joint Select Committee on Deficit Reduction. But Bowles rejected the comparison Monday saying in a statement that when he presented a plan to the committee, he "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."
Last week, Treasury Secretary Timothy Geithner delivered a plan to Capitol Hill on behalf of the White House calling for $1.6 trillion in new tax revenue over 10 years plus $400 billion in savings in entitlement programs. The proposal was flatly rejected by Republicans, who oppose any effort to end tax cuts for the nation's highest earners and advocate deeper spending cuts, particularly in entitlement programs like Medicare and Social Security.
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White House Communications Director Dan Pfeiffer slammed the GOP proposal.
"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," Pfeiffer said in a statement Monday. "Their plan ... provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve."
The president took to Twitter on Monday to boost grass-roots support for his plan to end George W. Bush-era tax cuts for high-income earners—families who annually earn $250,000 or more.
"High end tax cuts do least for economic growth & cost almost $1T," Obama tweeted during Monday's chat in response to a question about why the president doesn't favor maintaining low tax rates for everyone. "Extending middle class cuts boosts consumer demand & growth," the president added.
Both parties have been engaging in a public campaign to pressure each other as Congress is forced to come to an agreement before the Jan. 1 deadline when automatic spending cuts and tax increases will go into effect. Each side has accused the other of holding up a potential deal.
Chris Moody and Olivier Knox contributed to this story.
GOP moves on fiscal cliff, W.H. dismisses it
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GOP moves on fiscal cliff, W.H. dismisses it
