Democrats shrug off Republicans’ ‘fiscal cliff’ counter

Offer included $800B in tax hikes

  • **FILE** House Speaker John Boehner, Ohio Republican, participates in a ceremonial swearing in with Rep. Jim Jordan, Ohio Republican, on Capitol Hill in Washington on Jan. 5, 2011. (Associated Press)**FILE** House Speaker John Boehner, Ohio Republican, participates in a ceremonial swearing in with Rep. Jim Jordan, Ohio Republican, on Capitol Hill in Washington on Jan. 5, 2011. (Associated Press)
  • **FILE** Speaker of the House John Boehner, Ohio Republican, speaks Nov. 14, 2012, to reporters at the Capitol in Washington after the House Republicans voted for their leadership for the next session of Congress. He is flanked by Majority Leader Eric Cantor (left), Virginia Republican, and Rep. Lynn Jenkins, Kansas Republican. (Associated Press)**FILE** Speaker of the House John Boehner, Ohio Republican, speaks Nov. 14, 2012, to reporters at the Capitol in Washington after the House Republicans voted for their leadership for the next session of Congress. He is flanked by Majority Leader Eric Cantor (left), Virginia Republican, and Rep. Lynn Jenkins, Kansas Republican. (Associated Press)
  • President Obama delivers his speech to the Nunn-Lugar Cooperative Threat Reduction (CTR) symposium at the National Defense University in Washington on Dec. 3, 2012. Seated are (from left) Defense Secretary Leon Panetta and Sens. Sam Nunn and Richard Lugar. (Associated Press)President Obama delivers his speech to the Nunn-Lugar Cooperative Threat Reduction (CTR) symposium at the National Defense University in Washington on Dec. 3, 2012. Seated are (from left) Defense Secretary Leon Panetta and Sens. Sam Nunn and Richard Lugar. (Associated Press)
  • **FILE** House Budget Committee Chairman Paul Ryan, Wisconsin Republican, touts his 2012 federal budget during an April 5, 2011, news conference on Capitol Hill in Washington. (Associated Press)**FILE** House Budget Committee Chairman Paul Ryan, Wisconsin Republican, touts his 2012 federal budget during an April 5, 2011, news conference on Capitol Hill in Washington. (Associated Press)
  • **FILE** Traders work on the floor at the New York Stock Exchange in New York on Nov. 15, 2012. (Associated Press)**FILE** Traders work on the floor at the New York Stock Exchange in New York on Nov. 15, 2012. (Associated Press)
  • **FILE** House Speaker John Boehner (right), Ohio Republican, and Rep. Paul Ryan, Wisconsin Republican, walk in the Capitol in Washington on Sept. 13, 2012, en route to voting on a stopgap spending bill that avoids a government shutdown. (Associated Press)**FILE** House Speaker John Boehner (right), Ohio Republican, and Rep. Paul Ryan, Wisconsin Republican, walk in the Capitol in Washington on Sept. 13, 2012, en route to voting on a stopgap spending bill that avoids a government shutdown. (Associated Press)
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House Republican leaders delivered a $2.2 trillion “fiscal cliff” counteroffer to President Obama on Monday that included $800 billion in tax increases, but the White House and congressional Democrats said that still isn’t enough revenue to begin negotiating.

The GOP outline, which came in a letter from House Speaker John A. Boehner and his top lieutenants to Mr. Obama, called for $900 billion in cuts to projected entitlement spending and would also use a lower inflation measure to calculate future Social Security benefits.

Mr. Boehner told reporters he was trying to craft a middle-ground starting point after the White House last week proposed what he called a “la-la-land offer” that asked for $1.6 trillion in new taxes and up to $400 billion in potential spending cuts.

“That couldn’t pass the House, couldn’t pass the Senate and it was basically the president’s budget from last February,” the Ohio Republican said, referring to legislation that was defeated on unanimous votes in both chambers earlier this year.

The Republicans said they could raise taxes $800 billion by ending loopholes for the wealthy rather than raising their income tax rates, but the White House has insisted most of the new money must come from higher rates.

“The Republican letter released today does not meet the test of balance,” White House Communications Director Dan Pfeiffer said. “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.”

He said Mr. Obama “is willing to compromise” but that won’t happen until Republicans “get serious about asking the wealthiest to pay slightly higher tax rates.”

Both sides are rushing ahead of a year-end deadline to avoid across-the-board tax increases and $110 billion in automatic spending cuts, which have been dubbed the fiscal cliff. Together, they would plunge the country into a short, sharp recession, but would leave it in better fiscal and economic shape over the long run, the Congressional Budget Office said.

Lawmakers, though, want to minimize the pain. All sides want to extend the lower tax rates for most Americans, leaving the chief dispute over what happens to the tax cuts for couples making $250,000 or more a year.

The GOP made a major concession Monday when Mr. Boehner and his top House Republican allies said they would be willing to accept $800 billion in new taxes from those high-income taxpayers.

Republican leaders had said they would be willing to consider revenue but had left it vague whether that money would come from real tax increases or from the economic benefits of expanded growth. On Monday, top congressional aides said it would be real revenue under the definitions of the Congressional Budget Office, which is the official scorekeeper for these matters.

The new stance surprised some key Republicans.

Rep. Jim Jordan of Ohio, head of the Republican Study Committee caucus, said he did not know that House leaders planned to roll out their framework for averting the fiscal cliff.

“My general reaction is the good news is that it is obviously better than the bullet points the president gave, which was ridiculous,” Mr. Jordan said. “The bad news is that it is a tax increase and I am not going to vote for a tax increase because it hurts economic growth.

“If you are going to lower rates and close loopholes and do genuine tax reform, that is one thing because that contributes to economic growth,” he said. “But if you are going to raise taxes through closing loopholes, deductions, that is not economic growth. That is just a different way to raise taxes.”

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