New Counter-Proposals Offered Towards a Budget Compromise

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After a closed door budget meeting on Sunday between President Obama and House Speaker John Boehner (R-Ohio) that produced little news, on Monday President Obama provided a counter-proposal to the House Republican budget proposal and Boehner responded with a counter-proposal on Tuesday.

Both Democrats and Republicans are seeking ways to assert their control over how to reduce the federal budget by $4 trillion over the next 10 years and put the United States on a more fiscally responsible path towards lowering its $16.367 trillion deficit .

The Wall St. Journal reported on Tuesday that the White House slightly lowered its target or new tax revenue to $1.4 trillion, down from Obama’s initial offer of $1.6 trillion while still retaining stimulus spending and an increase in the U.S.’s borrowing limit, according to officials.

Speaker Boehner went to the House floor on Tuesday, requesting that Obama give more details on spending cuts.

“We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the balanced approach that he promised the American people,” Boehner said.

The White House rejected Boehner’s complaint that Obama hadn’t provided enough detailed spending cuts.

“There is a deal out there that’s possible,” White House spokesman Jay Carney told reporters.

“It could include reduced spending, more revenues and tax reform as long as Republicans accepted higher tax rates on the wealthiest Americans” Carney added.

“There’s a lot of specificity in there,” Carney told reporters. “We have not seen anything like that kind of specificity from Republicans” he said.

Carney said that House Republicans haven’t provided enough details about how they would raise revenue
in a fiscal-cliff deal.

Republicans sent Obama a new proposal yesterday in response to Obama’s counter-proposal on Monday, according to Michael Steel, a spokesman for Boehner.

Details of the Republican budget proposal are not known yet. However, the Republican budget plan is believed to contain some new cuts in entitlement spending such as Medicare, including an eligibility adjustment from 65 to 67 years.

“The Republican leader’s counteroffer would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs,” Boehner spokesman Michael Steel said.

While Republicans await more concessions from President Obama in the form of spending cuts and further reductions in government health care spending, Obama continues to showing little willingness to back down from his pledge to increase taxes on the wealthiest 2% of Americans.

Speaking directly recently to ABC News’ Barbara Walters which aired on Tuesday night, President Obama predicted that Republicans would join Democrats in extending the current tax rates for the remaining 98%.

“I’m pretty confident that Republicans would not hold middle class taxes hostage to trying to protect tax cuts for high-income individuals,” Obama told Barbara Walters.

Although Obama didn’t show any reluctance to raise the Medicare eligibility age as part of a future compromise with House Republicans to avert the fiscal cliff, he explained that the plan wouldn’t be cost effective.

“When you look at the evidence it’s not clear that it actually saves a lot of money,” he said during his interview with Barbara Walters.

“But what I’ve said is let’s look at every avenue, because what is true is we need to strengthen Social Security, we need to strengthen Medicare for future generations, the current path is not sustainable because we’ve got an aging population and health care costs are shooting up so quickly.”

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