WASHINGTON, Dec 3, 2012 (AFP) – Republicans on Monday laid out a proposal for closing the huge US deficit that raises half the income proposed by President Barack Obama and opposes a higher tax rate increase for the rich.
Their $2.2 trillion deficit reduction proposal agreed to the permanent extension of tax cuts, a move that would mitigate much of the impact of the looming fiscal cliff.
But they did not immediately address Obama’s call to modify or delay the drastic “sequester” spending cuts slated to begin on January 1 that could sharply slow growth.
Instead they proposed slashing $1.2 trillion from federal spending over 10 years, including $600 billion from Medicare, which covers health insurance for the elderly.
In a letter to Obama, top Republicans assailed his focus on raising government income by $1.6 trillion rather than spending cuts to right the deficit as “neither balanced nor realistic.”
And they rejected Obama’s insistence on extending the tax cuts only for middle class households, while raising rates for the wealthy.
“The proposal also includes four times as much tax revenue as spending cuts, in stark contrast to the ‘balanced approach’ on which you campaigned,” they said.
The Republicans countered with $800 billion in tax increases through “pro-growth tax reform” that lowers tax rates but boosts income by closing loopholes and special deductions for companies and households.
And against Obama’s $600 billion in spending cuts, the Republicans proposed a $1.2 trillion package based on a plan first introduced a year ago that was rejected in Congress.
“This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform,” the letter said.
But it called the Republican proposal “fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs.”
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