GOP: White House proposes $1.6T tax increase
Republicans familiar with a new White House offer on avoiding the so-called fiscal cliff say it looks almost exactly like President Barack Obama's budget proposal last February.
GOP aides say Treasury Secretary Tim Geithner presented an offer calling for $1.6 trillion in new tax revenue over the coming decade, extending the 2 percentage point payroll tax deduction or something comparable to it and $50 billion in stimulus spending on infrastructure projects.
The White House plan calls for $960 billion over the coming decade by increasing tax rates and taxes on investment income on upper-bracket earners and $600 billion in additional taxes. Republicans view the offer as a step backward with the fiscal cliff - an economy-rattling set of automatic spending cuts and tax increases - looming at years' end.
The only new spending cuts in the plan would come from administration proposals curbing health care programs by $400 billion over the coming decade and modest cuts from non-health programs like farm subsidies and cutting Postal Service costs and through higher fees on airline tickets. The plan would also boost spending by extending unemployment benefits for the long-term jobless, deferring looming cuts to Medicare payments to physicians and helping homeowners refinance "underwater" mortgages..
The aides said that Geithner also requested the equivalent of a permanent extension of the government's borrowing ability to avoid wrangling over the issue as in last year's summertime crisis over raising the so-called debt limit.
The measure would block $109 billion in automatic across-the-board spending cuts known as a sequester from striking the economy in January.
The aides required anonymity because of the sensitivity of revealing the offer made by Geithner to top Republican lawmakers in meetings in the Capitol on Thursday. A senior Capitol Hill Democratic aide confirmed that the GOP description of the Geithner proposal is consistent with the latest Democratic position. The aide was not authorized to discuss the proposal publicly and would do so only on condition of anonymity.