The House Republicans have responded to the president’s offer with essentially the “grand bargain” proposed in the summer of 2011. (This is only fitting since the president essentially gave Democrats his past budget proposal.)

House Speaker John Boehner said in a statement:

In a letter sent to President Obama today, House Republican leaders made a new offer to avert the fiscal cliff centered around a middle ground approach first presented to Congress last year by President Clinton’s former White House chief of staff, Erskine Bowles. The Bowles plan, presented in 2011 to the Joint Select Committee on Deficit Reduction, is consistent with the framework House Speaker John Boehner (R-OH) proposed the day after the election: a balanced approach of significant spending cuts and new revenues from tax reform with fewer loopholes and lower tax rates. This is another attempt to jumpstart substantive, good faith negotiations toward a bipartisan solution that can be enacted soon, a stark contrast to the unserious proposal the White House put forward last week.

In a document obtained by Right Turn from House Republicans, the plans match up as follows:

President’s Deficit Reduction
Tax Rates Increases:              $960B
Elimination of Deductions:      $600B
Spending Cuts:                         $400B

 

New Stimulus/Other
Infrastructure Spending:          -$95-425B
Payroll Tax Extension:            -$110B
Unemployment Insurance:      -$30B
Stimulus Tax Extenders:         -$27B
Unpaid for SGR Patch:            -$25B
Mortgage Plan:                        Unknown
Elimination of Debt Limit:                N/A
NET SAVINGS:          (At most) $1.673T

 

House Republican Counter
(Based on the Bowles Proposal to the Joint Select Committee on Deficit Reduction)
Deficit Reduction
Revenue through Tax Reform:       $800B
Health Savings:                               $600B
Other Mandatory Savings:             $300B
Revision to CPI:                              $200B
Further Discretionary Savings:     $300B
NET SAVINGS:                             $2.2T

A House leadership aide told Right Turn that “the GOP offer includes more deficit reduction than the White House offer last week, which included hundreds of billions in new ‘stimulus’ spending. Our net deficit reduction is $2.2 trillion, but if we were to utilize White House schemes to count (1) previously-enacted Budget Control Act savings, (2) a war savings gimmick, and (3) further interest savings, our proposal would result in $4.6 trillion in deficit reduction savings, much more than theirs.”

So we have the potential for a deal that is somewhere between Bowles’s plan last year and the president’s plan. It is not, however, a matter of simply total savings. The Republicans have included far less revenue, as well as less revenue to be obtained through tax reform. The Democrats have yet to present a substantive offer that looks at systemic entitlement reform. The Republicans have shown that, contrary to the liberal-media meme, Boehner and not Grover Norquist controls the House. (And we expect this is not even the final GOP offer, leaving room for more revenue perhaps.)

We are far from a deal. We’re not close, but we are no longer “nowhere.” Your turn, Mr. President.

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