Republican leaders in the House on Monday sent a counterproposal to the White House for averting the “fiscal cliff.” The plan would result in more than $2 trillion in savings without raising taxes on the wealthiest Americans.
The letter sent to President Barack Obama is based on the middle-ground approach first outlined to Congress last year by Erskine Bowles, who was former President Bill Clinton’s chief of staff and chaired Obama’s debt commission.
Bowles’s 2011 proposal consisted of spending cuts, healthcare, savings and new revenues through tax reform based largely on closing loopholes.
The more than $2 trillion blueprint doesn’t highlight many specifics, but calls for some $800 billion in new revenue through closing loopholes and capping deductions, all while lowering tax rates. Some $600 billion will also be cut from federal health programs, and 600 more from other mandatory and discretionary cuts. Other savings would come, in the amount of 200 billion over a decade, mainly from changes in the way inflation is calculated.
“This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform,” the letter signed by Speaker John Boehner and others read. “Indeed, the Bowles plan is exactly the kind of imperfect, but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs. We believe it warrants immediate consideration.”
The Republican leaders said if Obama agrees to the proposal they are “ready and eager to begin discussions.”
However, the proposal might already be dead as Obama has said time and again he will not accept any proposal that doesn’t include a raise in taxes for the wealthy.
The President has already put forward a plan calling for $1.6 trillion in new tax revenue, hundreds of billions in spending cuts, and for tax cuts to be extended for the middle class before the end of this month.
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