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Republicans Counter With $2.2 Trillion Deficit Plan

Dec 3, 2012
Originally published on December 3, 2012 6:08 pm

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

MELISSA BLOCK, HOST:

I'm Melissa Block.

And today there is a counter offer. Republicans have put forward the broad strokes of their proposal to avert the automatic tax hikes and spending cuts scheduled at the end of the year. It should sound familiar to those who followed the presidential campaign. House Speaker Jon Boehner offered a plan that borrows heavily from ideas put forth by Mitt Romney and Paul Ryan.

Conspicuously absent from the proposal is a tax rate increase for the richest two percent of Americans. That's something that President Obama has insisted upon.

NPR's David Welna joins us now from the Capital. And, David, first, how did Speaker Boehner describe the Republicans' plan today?

DAVID WELNA, BYLINE: Well, we heard it described as a bold counteroffer that's in response to what the White House offered to GOP leaders here on the Hill last week. And Boehner described that offer as being something that he said was from lala land. He's pretty dismissive of what the White House has put out there. It was $1.6 trillion in additional revenues, which is twice the amount that Boehner agreed to with President Obama during the debt ceiling standoff, about a year and a half ago.

The White House has been saying that Republicans have not put anything specific on the table, in terms of the spending cuts that Republicans are demanding. So this seems to be an effort to knock down some of that criticism. And what they've proposed, they say, is based on remarks made by Erskine Bowles last year to the Super Committee that was supposed to come up with more than $1 trillion in deficit reduction and failed to do so.

This is not the Bowles-Simpson proposal, rather it's something the Bowles suggested that if House Republicans refused to back down in their insistence on no new tax rates that they could do. Now, Bowles, of course, is a Democrat, so GOP aides say that what they've offered amounts to fair middle ground. And Boehner popped in at this meeting and he described the proposal as such.

REPRESENTATIVE JOHN BOEHNER: We could have responded in kind but decided not to do that. And what we're putting - forth is a credible plan that deserves serious consideration by the White House. And I would hope that they would respond in a timely and responsible way.

BLOCK: So, Speaker Boehner there, David, calling this a credible plan. What are some of the details?

WELNA: Well, it's $2.2 trillion deficit reduction plan. And it has about $2 in spending cuts in it for every dollar in additional revenue. And that's enough to make the so-called sequester that's promised for January 1st, the automatic spending cuts, go away because it more than compensates for those spending cuts. It takes big bites out of entitlement spending on things such as Medicare, Medicaid and Social Security - more than $1 trillion in reduced spending on those programs.

And it refuses to consider letting any tax rates go up, not even for the wealthiest taxpayers, while it gives no real specifics on how revenues would be raised beyond saying that they come from closing unspecified special interest loopholes and deductions. And they also say that they could generate another $800 billion in revenue by doing this and even cut taxes some more.

BLOCK: Well, David, yesterday, Speaker Boehner described negotiations as, in his words, nowhere. Does this proposal today move things forward in a substantial way?

WELNA: Well, it's hard to see how this counter-proposal is going to get the negotiating car out of the ditch, where it seems to be at the moment. The White House put out a statement saying that what Republicans are proposing does not meet the test of balance because it promises lower tax rates to the rich and, in the words of the White House, sticks the middle class with the bill. The president is willing to compromise on some things, that statement says, but not on his demand that the wealthy pay higher tax rates. So, it looks like this stand-off continues.

BLOCK: And briefly, David, what are the next steps...

WELNA: Well, speaker Boehner plans to go to the White House Christmas party tonight. And he says that he may run into the president there. So, I guess they'd have a chance to chat about this. The window for reaching a deal is closing very quickly; maybe another week or so to work out something that could be passed through Congress before the end of the year.

But there's also growing talk of a stopgap measure to hold off the fiscal cliff, if these talks don't conclude by then.

BLOCK: OK. NPR's David Welna at the Capital, David, thanks so much.

WELNA: You're welcome, Melissa. Transcript provided by NPR, Copyright NPR.