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White House Dismisses GOP Plan on Fiscal Cliff

President Obama; photo by Alex Wong/Getty Images

President Obama. File photo by Alex Wong/Getty Images.

The Morning Line

Four days after having its initial offer to avert the year-end fiscal cliff rejected by House Republicans, the Obama administration got to return the favor Monday when GOP lawmakers put forward a plan with $800 billion in fresh revenues but does not raise tax rates on wealthier Americans.

The Republican package, submitted by House Speaker John Boehner and other top Republicans, also included $600 billion in cuts to federal health programs, achieved by increasing the Medicare eligibility age from 65 to 67 and reducing benefits for more affluent elderly Americans.

GOP leaders called the blueprint “exactly the kind of imperfect but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs.”

But the Obama administration’s take was far more critical. “The Republican letter released today 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,” White House communications director Dan Pfeiffer said in a statement. “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.”

Senate Majority Leader Harry Reid, D-Nev., said in a statement that “simple math dictates that tax rates must rise” on families earning more than $250,000 a year. “The sooner Republicans grasp that reality, the sooner we can avoid the fiscal cliff,” Reid said.

House Republicans contended their framework resembled a plan put forward last year by Erskine Bowles, the Democrat who co-chaired President Obama’s bipartisan deficit reduction commission with former GOP Sen. Alan Simpson.

Bowles said in a statement that he was “flattered” Republicans would name their pitch after him but added that their offer did not represent his plan.

“Every offer put forward brings us closer to a deal, but to reach an agreement, it will be necessary for both sides to move beyond their opening positions and reach agreement on a comprehensive plan which avoids the fiscal cliff and puts the debt on a clear downward path relative to the economy,” Bowles said.

Bowles also spoke with Gwen Ifill on Monday, shortly after the news broke of a Republican counter-proposal.

Watch the segment here or below:

The former chief of staff to President Clinton said that the dueling plans were all part of the negotiating game. “That’s just a Kabuki theater you go through at each one of these,” Bowles said.

To reach an agreement, Bowles said both sides would need to give on items where they have currently dug in their heels. “I am positive that to get a deal done, you’re going to have to have higher tax rates on the top 2 percent. I’m equally sure that $350 billion worth of cuts that the president put on the table for health care entitlements is not going to be sufficient to get the deal done. There’s going to have to be some compromise,” he said.

With their offer immediately swatted aside, House Republicans charged the onus for coming up with a compromise was now back on Mr. Obama. “Republicans have once again offered a responsible, balanced plan to avoid the fiscal cliff, and the White House has once again demonstrated how unreasonable it has become,” Boehner spokesman Brendan Buck said in a statement. “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.”


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Jessica Fink contributed to this report.

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