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Standing Fast on Cliff, Both Sides Dig In

Democrats and Republicans now have formally traded offers on plans to avert the fiscal cliff, but neither proposal represents any significant movement from positions the two parties have held for more than a year.

With each side accusing the other of lacking seriousness, the two documents appear to be more public relations maneuvers than bargaining chips, and lawmakers appear no closer to a deal than they were weeks ago.

As Democrats battered them over the need to respond to President Barack Obama’s Nov. 29 offer, Speaker John A. Boehner of Ohio and House Republicans returned the White House’s volley on Monday, presenting the president with a counteroffer aimed at averting the fiscal cliff and reducing the deficit by $2.2 trillion.

The plan did not, however, propose higher tax rates for high-income earners, and so within two hours, the White House rejected it.

Neither Republicans nor Democrats were clear on how Congress would move forward. Some aides suggested that the mere fact that Republicans released a counteroffer was productive for talks, which Boehner said as recently as Sunday were “nowhere.” No Democratic source, however, seemed to view the GOP effort as serious, given it is largely a reiteration of the party’s stance from the 2011 debt limit talks.

Even as Democrats conceded Obama’s opening offer was largely cosmetic, too, they still feel they remain the party with leverage.

“This proposal contains no new concessions from the Republicans. It is a Republican wish list, just like the president’s opening position represented his ideal scenario,” one Senate Democratic aide said. “The difference is, the election showed the public prefers the president’s approach.”

The GOP offer came a few days after Treasury Secretary Timothy F. Geithner came to the Capitol with a proposal that was summarily rejected by House and Senate Republicans. That plan, largely mirrored by Obama’s budget blueprint from February, proposed $1.6 trillion in tax hikes and a permanent fix to the brinkmanship over the debt limit, among other things.

Boehner told reporters in a private meeting Monday that he offered a major concession by putting revenue through tax reform on the table after the elections and was dismayed by the White House’s opening offer.

“Unfortunately the White House responded with their la-la-land offer that couldn’t pass the House, couldn’t pass the Senate,” Boehner said. “We could have responded in kind but decided not to do that. And what we are putting forth is a credible plan that deserves serious consideration by the White House.”

Mere hours later, White House Communications Director Dan Pfeiffer said in a statement that the GOP plan “does not meet the test of balance.”

“In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill,” Pfeiffer said. “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.”

Later, Senate Majority Leader Harry Reid, D-Nev., took the plan to task, saying it would not solve the fiscal problem before the end of the year, and that Congress would have to have another showdown in 2013.

Boehner spokesman Brendan Buck responded, “If the president is rejecting this middle-ground offer, it is now his obligation to present a plan that can pass both chambers of Congress.”

The Republican plan calls for $1.4 trillion in spending cuts and $800 billion in tax increases, which senior Republican congressional aides said included more deficit reduction than the White House’s opening salvo and would come through tax reform in 2013, not through raising tax rates as Obama has demanded. It also is based on a plan floated by a former White House chief of staff, Erskine Bowles, who served on the president’s 2010 deficit commission. The plan suggests Congress could institute another trigger of sorts by passing a one-year extension of the 2001 and 2003 tax rates with an agreement to hold a vote on a comprehensive tax reform package when the rates are again slated to expire.

“You can’t rewrite the tax code in four weeks,” a senior GOP aide said. “There will be lots to fill in, for sure. But there have been plenty of policies that have been discussed over the last two years that will show you how to get there.”

On the spending side of the ledger, the plan would include $600 billion in health care savings, potentially through cuts to Medicare or an increase in the eligibility age, and it would institute another $300 billion in mandatory savings and $300 billion in discretionary cuts. Finally, the plan would call for revisions to the consumer price index, which the aides said would save $200 billion.

Republicans do not look to be backing away from that position, as the GOP conference circulated talking points to its members Friday advising them on how to attack the administration on a tax rate hike.

The Republican offer was largely met by shrugs from Hill Democrats, who questioned the plan’s lack of detail but did not seem as incensed as the GOP was last week at the release of the White House framework.

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