Boehner’s Counter-Offer: Based on Impromptu Bowles Super Committee Testimony
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Mr. BOWLES: You all are between $250 and $400 billion of additional cuts on discretionary, so I assumed that we could reach a compromise of an additional $300 billion on discretionary spending cuts.
On health care you are somewhere between $500 and $750 billion of additional health care cuts. I assumed that we could get to $600, and I got there by increases in the eligibility age for Medicare that I discussed with Senator Kerry when he was talking to me. That is about $100 billion. That would take you from the 500 where the Democrats are to $600 billion, and it happens to come not on the provider side, which I think would kind of balance that out.
On other mandatory cuts, you are somewhere between 250 and 400, so I settled on 300 there, and we had enough cuts in our plan to get you to 300 on the other mandatory….You agreed actually on CPI in your two plans of approximately $200 billion.
….That gets me to revenue. And on revenue I took the number that the Speaker of the House, I had read had actually agreed to, and I was able to generate $800 billion through revenue from the Speaker’s recommendation.
While Bowles arrived at his figures by including an increase in the Medicare eligibility age and a move to the chained CPI, not just for Social Security but apparently all social benefits with a cost-of-living adjustment, none of that appeared in the three-page Boehner letter. However, after the fact, GOP aides, speaking anonymously on background, said this was implicitly part of the Bowles plan that Boehner endorsed.
Well, this takes the cake. The Boehner plan, on paper, is just a set of topline numbers. It doesn’t even “avert the cliff” on the spending side, since it just replaces one set of $1.2 trillion in spending cuts with other cuts totaling $1.2 trillion, meaning the same impact to fiscal policy (unless it’s backloaded, which is not mentioned here). As the payroll tax cut and unemployment insurance would expire under this plan, the fiscal drag would be almost as much as it would if you just went over the cliff. And the only two specifics Bowles actually outlined are not in the letter, because Republicans don’t want to put it on paper for future posterity, but anonymous, cowardly aides say it’s part of the package? The White House told Republicans to submit their offer, and they do it in this way to ensure plausible deniability if Democrats make noise about it.
Meanwhile, Bowles rejected what was very charitably called his “plan.” But more critical to the ultimate outcome, conservatives trashed it because it dared to include an $800 billion increase in revenue, from deduction limits or closures, even as it contemplated lower tax rates.
Two high profile conservative groups lashed out Monday at the counteroffer made by House Republican leaders to President Obama in the “fiscal cliff” negotiations.
“Republicans were reelected in the House to stop Pres. Obama’s agenda, not figure out creative ways to fund it,” Dan Holler, communications director for Heritage Action for America, a sister organization of the Heritage Foundation, told The Hill in an email.
And Americans for Prosperity, a conservative group partially funded by the billionaire Koch brothers, said the GOP offer “left conservatives wanting.”
RedState mocked Boehner by raising the white flag in surrender in their response. This suggests that Boehner has a much more pressing problem to his right in the negotiations, making it harder for him to put a deal together. He’s already working to strong-arm those folks, which we’ll address in a subsequent post.