The Republicans just sent the White House a letter proposing a counteroffer in dealing with the fiscal cliff. While they suggest this is based upon the always popular — yet barely understood Simpson-Bowles plan — the proposal skips over the most fundamental component of Simpson-Bowles, which is the need to increase taxes. It replaces this component with magic.
My initial reaction is that this counteroffer has the gall to propose $0 in tax increases. That’s a big break from President Obama’s $1.6 trillion in new revenues. Republicans vaguely suggest that $800 million could be raised through “tax reform,” but that rates would not be touched. The details are barely sketched out, but getting this number without raising rates would require one of two assumptions. Either (a) cutting back on a number of tax deductions targeted toward the middle class like the home mortgage deduction, or (b) an unrealistic dose of “dynamic scoring,” a commonly employed Republican trick that says, “sure this change would only raise $200 million, but we’ll assume — without much evidence — that the economy will quadruple in size.”
So keep an eye out for that one when you hear Republicans cite numbers.
So with a half-hearted revenue plan, what’s do the Republicans offer for spending cuts? Well there is, “$600 billion in health savings and changes to CPI.” President Obama was already proposing around $400 billion in Medicare cuts, so this may be a point for negotiation something down the middle. More likely though, this proposal probably includes cuts to Obamacare that would ultimately hurt the economy more in the long run because the Republicans have not been shy in proclaiming that Obamacare is on the table for this deal.
The plan also outlines “$600 billion in other savings, split evenly between mandatory and discretionary spending.” It’s not entirely clear what these would be, but if we can take any cues from the GOP’s previous commitment to the Paul Ryan budget we can assume that there are absolutely no specifics. The Ryan budget was noteworthy for its ability to garner the epithet “serious” while failing to include specifics. It’s a PR job that you couldn’t wish for if you tried.
After seeing the detailed plan provided by President Obama ridiculed as “unserious,” it approaches surreality to see this put forward as the Republican counteroffer. It smacks of the sort of cynicism that only the modern Republican Party could provide.