In Obama Makes Third Fiscal Cliff Offer, Sam Stein reveals the details of President Obama's third offer, given to him by an anonymous source, and made to John Boehner today, (Monday), for a grand compromise to avoid the "fiscal cliff," and deferring the debt limit for two years.
The White House has moved off of its initial and second revenue demands of $1.6 trillion and $1.4 trillion respectively. As of now, the president would be fine raising $1.2 trillion in revenue. He also is no longer insisting that taxes increase on families with income above $250,000. Instead, he is calling for a permanent extension of the Bush tax cuts for incomes of less than $400,000.As part of his proposal for $1.2 trillion in revenue, the President is proposing that itemized deductions be limited to 28%, and would return the estate tax to 2009 levels meaning that estate worth more than $3.5 million would be taxed at a 45% rate.
But, the President does apprently propose $130 billion in savings from the "chained CPI."
In his latest offer to Boehner, the president proposes $800 billion in savings, including $290 billion in interest savings, $100 billion in defense cuts, and $130 billion in savings that would come from an adjustment to the inflation index for Social Security benefits. The administration insisted that there would be "protections for most-vulnerable populations" perhaps by indexing the changes so that they don't affect those with low-income. ...
Additional components of the proposal include language that would call for the fast track pursuit of corporate and individual tax reform as well as "spending reform." The White House proposal calls for a permanent extension of certain tax extenders (which ones weren't made entirely clear) and the alternative minimum tax. The payroll tax cut passed two years ago would, under this proposal, be allowed to lapse without an apparent replacement -– a major blow for progressive economists, who argue that the economy is too fragile to take such a hit.
Our President is also asking for an extension of unemployment benefits, and some amount for infrastructure spending, although it is not clear if it is still as much as the $50 billion he was asking for in his previous proposal. He is also asking for a two year extension of the debt-limit, with Congress being force to vote on not raising the debt limit which he could then veto. Previously Speaker Boehner has said there is no chance that Congress will give up the right to control the debt limit, and has only offered to extend by one year.
The President's offer does not include raising the eligibility age on Medicare but does offer $400 billion on "health care savings."
Speaking for Boehner, Micheal Steel says the President plan is a step in the right direction, but the $930 billion in spending reductions falls short of the $1.3 trillion of increased revenue so is not "balanced."