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| Republicans offer fiscal cliff proposal that avoids raising taxes on wealthy | Republicans offer fiscal cliff proposal that avoids raising taxes on wealthy |
| (8 days later) | |
| Republican leaders have made their first counter bid in the ongoing poker game with the White House over the fiscal cliff, proposing new tax revenues and cuts in health and social security spending but continuing to resist any discussion of raising taxes on the wealthiest Americans. | Republican leaders have made their first counter bid in the ongoing poker game with the White House over the fiscal cliff, proposing new tax revenues and cuts in health and social security spending but continuing to resist any discussion of raising taxes on the wealthiest Americans. |
| The counter-proposal comes in the form of a letter to President Obama signed by six prominent Republicans, including John Boehner, speaker of the House of Representatives; House majority leader Eric Cantor; and Paul Ryan, Mitt Romney's vice-presidential candidate and a leading fiscal conservative. | The counter-proposal comes in the form of a letter to President Obama signed by six prominent Republicans, including John Boehner, speaker of the House of Representatives; House majority leader Eric Cantor; and Paul Ryan, Mitt Romney's vice-presidential candidate and a leading fiscal conservative. |
| The letter begins on a note of compromise. The Republican signatories say that in the wake of "a status quo election … the American people rightly expect both parties to come together on a fair middle ground and address the nation's most pressing challenges." | The letter begins on a note of compromise. The Republican signatories say that in the wake of "a status quo election … the American people rightly expect both parties to come together on a fair middle ground and address the nation's most pressing challenges." |
| The proposal is based on previous work by Erskine Bowles, a former chief of staff to Bill Clinton who co-chaired the Simpson-Bowles commission that last year failed to find a way through the fiscal impasse. It proposes $800bn in new tax revenues – a significant step by the Republicans who have tended to resist any such move. | The proposal is based on previous work by Erskine Bowles, a former chief of staff to Bill Clinton who co-chaired the Simpson-Bowles commission that last year failed to find a way through the fiscal impasse. It proposes $800bn in new tax revenues – a significant step by the Republicans who have tended to resist any such move. |
| But it sidesteps the cause of the current deadlock by continuing to refuse to allow the tax rate on the top 2% of income earners to rise back to the levels held under the Clinton administration. Instead, the tax rises would come from closing "special-interest loopholes and deductions" while lowering tax rates for all Americans, including the very rich. | But it sidesteps the cause of the current deadlock by continuing to refuse to allow the tax rate on the top 2% of income earners to rise back to the levels held under the Clinton administration. Instead, the tax rises would come from closing "special-interest loopholes and deductions" while lowering tax rates for all Americans, including the very rich. |
| That is unlikely to satisfy Obama, who since he was returned to the White House in the 6 November election has adopted a far more bullish stance in his negotiations with the Republicans. The new-look tough Obama was underlined by Jay Carney, White House spokesman, who told reporters earlier in the day: "The president will not sign a bill that extends the Bush-era tax cuts for the top 2%. Full stop." | That is unlikely to satisfy Obama, who since he was returned to the White House in the 6 November election has adopted a far more bullish stance in his negotiations with the Republicans. The new-look tough Obama was underlined by Jay Carney, White House spokesman, who told reporters earlier in the day: "The president will not sign a bill that extends the Bush-era tax cuts for the top 2%. Full stop." |
| Carney emphasised the electoral mandate which the Obama team of negotiators believe give him a strong position as the talks on the fiscal crisis enter their tense final days. If agreement is not reached by 1 January, then a $607bn package of cuts and tax rises automatically kick in. | Carney emphasised the electoral mandate which the Obama team of negotiators believe give him a strong position as the talks on the fiscal crisis enter their tense final days. If agreement is not reached by 1 January, then a $607bn package of cuts and tax rises automatically kick in. |
| The Republicans want to maintain present advantageous tax rates for the wealthy, but "the American people overwhelmingly disagree," Carney said. Obama also took to the stage of the social media platform Twitter in an attempt to sustain popular pressure on Congress in favour of a deal that would include tax rises on those above $250,000 in income. | The Republicans want to maintain present advantageous tax rates for the wealthy, but "the American people overwhelmingly disagree," Carney said. Obama also took to the stage of the social media platform Twitter in an attempt to sustain popular pressure on Congress in favour of a deal that would include tax rises on those above $250,000 in income. |
| In his Twitter town hall, Obama expressed his willingness to find a compromise with the Republicans. He said in one tweet "don't expect 100% my budget; room to negotiate". | In his Twitter town hall, Obama expressed his willingness to find a compromise with the Republicans. He said in one tweet "don't expect 100% my budget; room to negotiate". |
| But he also kept up the heat on the opposition party by warning that if they continued to resist the end of the Bush-era tax cuts for the top 2% of earners, that would lead to "cuts w/out revenue = reductions in student loans; work/study and college tax credits expire. Bad for growth." | But he also kept up the heat on the opposition party by warning that if they continued to resist the end of the Bush-era tax cuts for the top 2% of earners, that would lead to "cuts w/out revenue = reductions in student loans; work/study and college tax credits expire. Bad for growth." |
| He also warned that failure of Congress to budge on taxes would lead to possible cuts in the tax deductions for home owners – a move that would be highly unpopular with large numbers of voters and could cost the Republicans dear. "If top rates don't go up, danger that middle class deductions get hit," Obama tweeted. | He also warned that failure of Congress to budge on taxes would lead to possible cuts in the tax deductions for home owners – a move that would be highly unpopular with large numbers of voters and could cost the Republicans dear. "If top rates don't go up, danger that middle class deductions get hit," Obama tweeted. |
| In their letter, the Republican leaders also propose $600bn of cuts in federal health budgets and savings of $200bn achieved by using a lower rate of inflation to calculate government benefits such as social security. The plan remains very light on details – a criticism frequently levelled by the White House at the Republicans in recent weeks. | In their letter, the Republican leaders also propose $600bn of cuts in federal health budgets and savings of $200bn achieved by using a lower rate of inflation to calculate government benefits such as social security. The plan remains very light on details – a criticism frequently levelled by the White House at the Republicans in recent weeks. |
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