Fiscal Cliff: The R’s Counteroffer

December 4th, 2012 at 2:30 pm


My take on this from last night is below, but here’s a link to CBPP’s Bob Greenstein’s detailed analysis.  Bob amplifies the key points about lack of specificity, something I find a bit scary at this point in the negotiations.  Again, I’m glad they’ve got a counteroffer and I wouldn’t expect to like what’s in there but to suggest we can save about $300 billion more than the President’s detailed savings from Medicare and Medicaid, without saying how, is simply irresponsible at this point.  As is claiming $800 in revenues from unspecified loophole closures.

As Bob concludes:

In short, people with low incomes or serious disabilities, and elderly people of modest means, would face substantial cuts — but people at the top would get to keep a significant share of their munificent tax cuts.

[Last night’s take:]

Rep Boehner has come back with a counteroffer to the President’s opener, so the fiscal cliff negotiations are underway.  That’s good.

What’s less good is the R’s offer itself.  It’s way too vague.  The time for stuff like this—”new revenue would be generated through pro-growth tax reform that closes special interest loopholes and deductions while lowering rates”—is long past.  That formulation didn’t work for Romney in the campaign, when you’d expect such vagueness.  With the cliff a few weeks away, it’s useless.

Again, this is first glance, but it looks like the R’s want to lower tax rates, claim $800 billion in new revenue from unnamed sources, raise the eligibility age for Medicare, cut Social Security benefits, and forbid dancing on alternate Saturdays.

OK, I made that last part up.  But this is far from a serious offer.  I get that they didn’t like what the President brought to the table, but at least it was a coherent, detailed plan, largely derived from his 2013 budget.  I expected their counteroffer to contain things D’s won’t like.

But this isn’t a real offer.  At some point, the R’s are going to have to actually say, with specificity, what they’re for.

Those of us who want to see this calamity resolved anxiously await such a real offer.

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9 comments in reply to "Fiscal Cliff: The R’s Counteroffer"

  1. mitakeet says:

    At this point I am actually hoping that we ‘go over the cliff’. I think that once the rates reset and the cuts fall on defense everyone will get a lot more negotiable. Even if they don’t, at least we have all that new revenue to act as a stimulus for recession 2.0. As much as the cuts to the safety net will suck, at least it also comes with cuts to that damn DoD budget, though those cuts are far FAR from what is necessary.

    Pretty sad, isn’t it, when you arrive at the depressing realization that the best we can hope from our government is that it doesn’t do anything at all?

    • Bumpa says:

      Republicans had it right to not trust the government, they’ve succeeded in making it as ineffectual as they can. We know who is to blame for this state of affairs.

  2. Jim says:

    What happens if the predicted recession does not occur? We are going back to the tax rates of the nineties are we not, when the country managed to get along just fine.

  3. urban legend says:

    Will the NYT, Washington Post, NBC, CBS, ABC, PBS, CNN and AP be honest enough to trumpet the fact that there’s nothing to the so-called counter-offer. If they do their job — I do not expect it from these corrupted people — pressure will build on the Republicans to stop their stonewalling. Of course, the Republicans will not propose anything specific lest they be branded forever, if they are not already, with having no interest whatsoever in people not in the 1%. If Democrats keep pressing the “stonewalling” line — that may indeed be the word — and keep the pressure on the press to report it accurately, that may be the ticket for forcing a people-friendly deal before December 31.

  4. Fred Donaldson says:

    If you spend your life in school, then decades attending “functions”, would you be ready for Medicare at 67, the new age requested by the GOP budget? Actually, would you need Medicare, or would health insurance be a tiny part of your budget, administered by your personal assistant?

    The rest of us will go nuts and broke finding affordable insurance for the years after we retire, and more and more folks are hitting that wall at 62, not 65, because they can’t find a job or are too sick to work.

    Government should not be an accounting exercise, crowing about numbers, but we seem to have replaced “pursuit of happiness” with “pursuit of property” on the right side of the aisle.

  5. Bumpa says:

    The R’s aren’t FOR anything other than establishing themselves as the chosen few. SS and Medicare have NOTHING to do with the deficit, should be taken OFF the table and NOT brought up again! I’m of the opinion that going off the fiscal cliff isn’t nearly as bad as the economy we’d have if the R’s get their way.

  6. Susan Duclos says:

    —–The time for stuff like this—”new revenue would be generated through pro-growth tax reform that closes special interest loopholes and deductions while lowering rates”—is long past. That formulation didn’t work for Romney in the campaign, when you’d expect such vagueness. With the cliff a few weeks away, it’s useless.——-

    It may look vague on paper, but why specify when Obama’s White House website already admits that “Limiting the cap to those with incomes over $250,000 leaves only $800 billion in revenue”

    It further stipulates “Thus, the amount of revenue that could be raised from taxpayers making more than $250,000 is only about $800 billion.”

    If both sides agree, despite Obama’s public statements to the contrary, that there is $800 billion in revenues from loopholes and deduction caps, then why bother detailing it until the framework itself is agreed on?

    The problem with providing too many itemized details without a hope of any type of agreement from Democrats, is that the detractors from your own side have more time to get peeved.

    Republicans messaging problem is not enough of us are highlighting that Obama’s White House website has already stipulated those revenues are there.

    • Jared Bernstein says:

      Read the second bullet from the WH analysis. You’d have to phase it in, which gets you to $650 bn. And that’s a cap on all deductions–not what the R’s said. They said “close loopholes.” Once they go there, they need to specify which ones.

  7. PeonInChief says:

    Has anyone thought about whether or not increasing the eligibility age for Medicare wouldn’t cost more money, in that people who are in their early sixties and just waiting to get Medicare so that they can get major medical procedures wouldn’t just end up waiting longer, thus allowing their health to deteriorate. Any savings we might gain could be lost in the increased cost for 67-year-olds who have been waiting for four years instead of two.