U.S. House Speaker John Boehner proposed $2.2 trillion of spending cuts and new revenue that lack what President Barack Obama calls essential for a fiscal agreement: higher tax rates for top-earning Americans.
Boehner, an Ohio Republican, yesterday called it a “credible plan that deserves consideration by the White House.” The Obama administration promptly rejected the proposal, which would raise the Medicare eligibility age and slow Social Security cost-of-living increases.
[...] With the Republican blueprint, both parties now have their opening offers on the table. Nebraska Senator Ben Nelson, a Democrat, said the Republican plan signals “act two” in negotiations over the so-called fiscal cliff. “There will be an act three undoubtedly, and hopefully the distance between the bid and ask is closed,” he said.
In fairness, at least one of the aspects noted above might make sense, in a perverse way: raising the Medicare eligibility age.
Look, people are going to have to work longer for a bunch of reasons (not least of which is the two major recessions that have triggered on the watch of President Bush, destroying 401(k)s), which means there is a good chance that they'll have private health insurance available to them under Obamacare. By delaying the port over to Medicare, the nation could save billions over time.
Of course, who relies on Medicare but the folks who weren't able to sock away shrinking wages for retirement.
Buried in the proposal is a signal that Republicans might consider a net hike in tax revenues (which I alluded to yesterday) but not a raise in rates. This would entail closing deductions like the home mortgage interest deduction (again, the hike would fall disproportionately on the middle class and destroy the housing market at a time it is already crippled, as it would discourage home buyers and deflate real estate prices, which fuel much of consumer spending.)