Republican proposal is step toward ‘fiscal cliff’ compromise
Though President Obama quickly dismissed the Republicans’ deficit-reduction proposal this week as “out of balance,” the plan offered by House Speaker John A. Boehner (R-Ohio) provides his party the negotiation starting point his side had lacked. More important, it’s a sign that America might not be pushed over the “fiscal cliff” after all.
The proposal was what you could come to expect from a Republican initial offer -- no tax rate increases and deep cuts to social programs -- but it’s also a starting point for the nitty gritty of behind-closed-door negotiations.
Republicans had said that indicating they were open to new revenue sources after the election was in itself an initial bid, an opening volley in fiscal cliff gamesmanship. But simply showing flexibility on a no-tax pledge to Grover Norquist without offering anything more isn’t a real proposal, it’s just showing you won’t automatically take your ball and go home.
In their latest offer, the GOP leaders endorsed the outline of compromise that Democrat Erskine Bowles had recommended last year to the “super committee” that tried in vain to agree on a deficit-cutting plan. The 10-year blueprint would raise $800 in additional tax revenue through what Boehner described as a “pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.” It also could cut $300 billion over 10 years in unspecified discretionary spending, find $900 billion in unspecified savings in entitlements (including $600 billion in healthcare programs such as Medicare and Medicaid), and $200 billion in savings by reducing the cost-of-living adjustments to Social Security and other federal benefit programs. The proposal offered little detail about how the savings would actually be achieved, but it provided a much-needed counterpoint to Obama’s proposal.
This is how real negotiations start.
The White House said the Republican plan failed the “balance test” to solve the deficit. But with Obama’s $1.6 trillion in tax increases and $400 billion in cuts to healthcare programs also on the table, which Republicans called “laughable,” perhaps a balance can be found somewhere in the middle.
Bowles, the co-chairman of the bipartisan deficit-reduction commission Obama appointed in 2010, said “every offer put forward brings us closer to a deal, but to reach an agreement, it will be necessary for both sids to move beyond their opening positions.”
Neither side will get everything it wants to reduce the deficit. That’s how negotiations work. But with their initial positions clearly staked for both sides to see, finding agreement somewhere in between should be easier to reach.
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