Yes, you are reading that correctly.
WASHINGTON D.C. - The first serious proposals from the White House to solve the looming “fiscal cliff” of tax rises and budget cuts appear to have been rejected out of hand by Republican leaders in Congress.
Treasury secretary Timothy Geithner is reported to have offered a set of proposals that include increasing tax rates on the wealthy, a one-year postponement of scheduled cuts in defence and domestic spending, and $400bn in savings from *Medicare and other entitlement programmes.
*[I’ll post about their Medicare cut strategy soon. It’s machavellian, it’s so good]
The proposals from the White House – the first to use hard numbers – include a $1.6 tn tax increase, a $50bn stimulus package and new presidential powers to raise the federal debt limit without congressional approval.
But based on public and private comments after their meetings, both House speaker John Boehner and Senate minority leader Mitch McConnell – the two most senior Republicans in Congress – brushed aside the proposals as incomplete.
Boehner said later: “No substantive progress has been made in the talks between the White House and the House over the last two weeks.”
Boehner is said to have demanded matching spending cuts in return for raising the federal debt ceiling, which limits the total amount the US government can borrow. The Congressional Budget Office estimates it will be breached in February or March next year.
USA Today reports that three Republican congressional aides familiar with the president’s offer cast it as an “outrageous” proposal that surprised the speaker and has set back negotiations on how to avoid the fiscal cliff coming at the end of the year, when all of the Bush-era tax rates expire and the first of $1.2tn in spending cuts over 10 years are triggered. (read more)