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Obama Makes Aggressive Opening Bid in Fiscal Negotiations

Elections, apparently, have consequences.
 
 
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Progressives who have worried that the Obama administration would give away too much at the onset of negotiations to avert the fiscal slope should be quite pleased to see the proposal offered by the White House on Thursday. It has Republicans outraged.

From the New York Times:

Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal on Thursday to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, $50 billion in immediate stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits.

The proposal, loaded with Democratic priorities and short on detailed spending cuts, met strong Republican resistance. In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced the goal of finding $400 billion in savings from  Medicare and other social programs to be worked out next year, with no guarantees.

He did propose some upfront cuts in programs like farm price supports, but did not specify an amount or any details. And senior Republican aides familiar with the offer said those initial spending cuts might be outweighed by spending increases, including at least $50 billion in infrastructure spending, mortgage relief, an extension of unemployment insurance and a deferral of automatic cuts to physician reimbursements under Medicare.

Here's a detailed summary that Republicans are circulating:

STAGE ONE

Taxes

  • Immediate increase in both top marginal rates, as well as capital gains and dividends: +$960 Billion
  • Additional taxes: +$600 Billion
  • 2009-level estate tax
  • AMT and business tax extenders: -$236 Billion
  • Payroll tax extension or alternative policy: -$110B
  • Bonus depreciation extension

Spending/Extras

  • $50 billion stimulus package in FY13
  • Mass refi mortgage proposal
  • Deferral of sequester
  • Savings from non-entitlement mandatory programs
  • Extension of unemployment insurance: $30 billion
  • Medicare SGR Patch: $25 Billion
  • Increase in the debt limit to avoid requiring Congress to vote to increase

STAGE TWO:

  • Tax reform consistent with $1.6 trillion tax increase
  • Entitlement policies from President’s FY13 budget that could total $400 billion in savings
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