White House rushes to reject GOP fiscal compromise

Neil Munro White House Correspondent
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White House officials rushed to dismiss a GOP compromise offer on the “fiscal cliff” on Monday, bolstering some Republicans’ spreading concerns that President Barack Obama is willing to risk an economic shock to grab a political advantage for his party in the 2014 midterm elections.

In a rapid-fire series of White House tweets and statements, the GOP proposal was rejected as unserious, a “step backwards” and “nothing new.”

Dan Pfeiffer, the White House’s communications director, said the proposal “does not meet the test of balance,” echoing the president’s insistence that GOP legislators break their repeated promises to not raise tax rates.

“WH aides tell me they do not believe they need to respond … until GOP budges on tax rates,” said a 5:39 p.m. tweet from MSNBC anchor Chuck Todd.

The GOP plan was announced at 3:19 p.m. It endorsed a plan sketched out by a Democratic leader, Erskine Bowles, in November 2011 to curb the fast-growing deficit.

His plan offers “a balanced approach of significant spending cuts and new revenues from tax reform with fewer loopholes and lower tax rates,” said a 3.19 p.m. letter from House Speaker John Boehner to the White House.

“This is another attempt to jumpstart substantive, good faith negotiations toward a bipartisan solution that can be enacted soon, a stark contrast to the unserious proposal the White House put forward last week,” said the letter.

Bowles served as former President Bill Clinton’s chief of staff, and ran for Senate as a Democrat. He’s a centrist liberal, not a progressive like Obama.

The letter was sent in response to last week’s proposal from Obama.

Under that proposal, Congress would raise taxes by $1.6 trillion and launch a new stimulus costing at least $50 billion, averting the so-called fiscal cliff of scheduled tax-increases and spending cuts that threaten to shock the economy back into recession in January.

If not fixed, the tax increases and spending cuts would suck roughly $500 billion from the economy.

But Obama’s proposal did not detail any long-term spending cuts, and instead invited Republicans to propose cuts adding up to $600 billion.

The debate over how or whether to cut spending by $600 billion would be conducted in the run-up to the 2014 midterm elections, likely hurting the GOP’s chances among elderly voters.

Even if implemented, Obama’s conditional offer to cut $600 billion would trim roughly one percent of the federal government’s planned $45 trillion in spending over the next decade.

The GOP is trying to show the public they’re trying to compromise, in part, because the party does not want to be blamed for the failure of negotiations.

GOP leaders expect Obama and his allies to blame 2013 economic troubles on the GOP’s refusal to raise taxes, and to use the same argument in the 2014 midterm elections.

The Boehner letter wraps the GOP’s conciliatory position around Bowles, whom Obama picked in 2010 to co-hair the National Commission on Fiscal Responsibility and Reform.

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