GOP Deficit Proposal Includes Tax Revenue, Changes to Medicare
On Monday, Republican congressional leaders released a counter offer to President Obama's deficit-reduction proposal that would raise $800 billion in new tax revenue and calls for $600 billion in automatic tax increases and reductions to federal health care programs in 2013, the Washington Post reports (Montgomery, Washington Post, 12/3).
About the GOP Proposal
The GOP proposal would generate savings from entitlement programs in part by increasing the Medicare eligibility age from 65 to 67 and reducing benefits for high-income beneficiaries.
The proposal also would save an estimated $200 billion over a decade by altering the way the government calculates inflation, which would slow benefit increases in federal programs, including Medicare. In total, the GOP plan would result in about $4.6 trillion in savings over 10 years.
In a letter to Obama, House Speaker John Boehner (R-Ohio) and other Republican leaders said the proposal was a conciliatory move. They wrote, "Mindful of the status quo election and past exchanges on these questions, we recognize it would be counterproductive to publicly or privately propose entitlement reforms that you and the leaders of your party appear unwilling to support in the near termâ (Weisman , New York Times, 12/3).
White House Criticizes Proposal
White House officials criticized the proposal for being unbalanced, saying the cuts to federal entitlement programs would outweigh higher taxes (Washington Post, 12/3).
Dan Pfeiffer, White House communications director, said, "The Republican letter released today does not meet the test of balance," He added, "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."
Two Sides Still Far Apart; Downpayment is Sticking Point
Although both sides have now proposed a deficit-reduction plan, the parties remain far apart in negotiations, the Times reports (Weisman , New York Times, 12/3).
Although Obama and Boehner generally agree that major changes to federal entitlement programs and the tax code should be worked out in legislation next year, they have differing opinions on how to address the initial downpayment, the New York Times reports.
Obama's plan calls for a large downpayment. He said that because he and congressional leaders have agreed to reduce spending over the next 10 years but have not reached a compromise on tax increases, the downpayment should be made up almost entirely of tax increase on higher-income individuals.
However, Republicans want a smaller downpayment that includes immediate savings from entitlement programs. Republicans have said that they do not want to agree to raising taxes in exchange for open promises of future spending cuts (Weisman , New York Times, 12/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.