GOP 'Cliff'' Plan: Cut Medicare and Social Security
Seeking to jump-start stalled talks on avoiding the "fiscal cliff," House Republicans on Monday proposed a new 10-year, $2.2 trillion blueprint to President Barack Obama that calls for increasing the eligibility age for Medicare and lowering cost-of-living hikes for Social Security benefits.
But the White House criticized the plan as failing the "balance test" by not including higher tax rates for the wealthy.
The proposal from House Speaker John Boehner and fellow Republicans comes in response to Obama's offer last week to raise taxes by $1.6 trillion over the coming decade but largely exempt Medicare and Social Security from budget cuts.
It was presented shortly after Obama took to the Twittersphere to lobby for his proposal, which drew scorn from Republican leaders last week.
The GOP plan proposes to raise $800 billion in higher tax revenue over the decade but it would keep the Bush-era tax cuts -- including those for wealthier earners targeted by Obama -- in place for now.
The offer comes after the administration urged Republicans to detail their proposal to cut popular benefits programs like Medicare, Social Security and Medicaid.
"After the election I offered to speed this up by putting revenue on the table and unfortunately the White House responded with their la-la land offer that couldn't pass the House, couldn't pass the Senate and it was basically the president's budget from last February," Boehner told reporters.
The White House quickly panned the proposal. "Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve," White House Communications Director Dan Pfeiffer said in a statement.
"Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won't be able to achieve a significant, balanced approach to reduce our deficit our nation needs," Pfeiffer added.
The Boehner proposal revives ideas from failed talks with Obama in the summer of 2011. Then, Obama was willing to discuss politically controversial ideas like raising the eligibility age for Medicare, implementing a new inflation adjustment for Social Security cost-of-living adjustments and requiring wealthier Medicare recipients to pay more for their benefits.
The clock is ticking closer to the end-of-year deadline to avert the fiscal cliff, which is a combination of the expiration of Bush-era tax cuts and automatic, across-the-board spending cuts that are the result of prior failures of Congress and Obama to make a budget deal.
Many economists say such a one-two punch could send the fragile economy back into recession.
Last week, the White House delivered to Capitol Hill its opening proposal: $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit.
In exchange, the president would back $600 billion in spending cuts, including $350 billion from Medicare and other health programs. But he also wants $200 billion in new spending for jobless benefits, public works projects and aid for struggling homeowners. His proposal for raising the ceiling on government borrowing would make it virtually impossible for Congress to block him going forward.
On Tweeter on Monday,Obama's said: "hey guys - this is barack. ready to answer your questions on fiscal cliff."
Minutes later, Republican House Majority Leader Eric Cantor tweeted: "Mr. President, time to get serious. Let's protect small businesses and families from a harmful increase in tax rates and cut spending."
The first question was: "Mr. President, can you assure us that any "fiscal cliff" negotiations regarding entitlement reform will not hurt the most needy?" Obama replied: "we can reduce deficit in balanced way by ending tax cuts for top 2% reforms that strengthen safety net & invest in future."
One questioner asked: "As a recent college grad w/o a full time job, these cuts wouldn't help me, would they?" Obama responded: "w/out revenue =reductions in student loans; work/study & college tax credits expire. Bad for growth. like your hair!" That was reference to the purple hair of the questioner's doppleganger.
The final question was: "Who will win it all first: Chicago #WhiteSox,#Bulls,or #Bears?#NFL#NBA#MLB. Obama replied: "da bears still gotta shot, despite sad loss this weekend! plus rose will return for playoffs!!!"
Then he tweeted: "Gotta go. Thx. Keep pressure on Congress. Call, email,tweet your Member & tell them what 2k means to you. Lets get it done. #my2k –bo"