GOP proposes new 'fiscal cliff' offer to Obama

WASHINGTON (AP) — House Republicans on

Monday proposed a new 10-year, $2.2 trillion blueprint to President

Barack Obama that

calls for raising the eligibility age for Medicare and lowering

cost-of-living hikes for Social Security benefits, a counteroffer

to jump-start stalled talks with the "fiscal cliff" just weeks

away.

The proposal from House Speaker John Boehner, R-Ohio, and other Republicans comes in response to Obama's plan last week to

raise taxes by $1.6 trillion over the coming decade but largely exempt Medicare and Social Security from budget cuts.

The GOP plan also proposes to raise $800 billion in higher tax revenue over the decade but it would keep the Bush-era tax

cuts — including those for wealthier earners targeted by Obama — in place for now.

Dismissing the idea of raising any tax

rates, the Republicans said the new revenue would come from closing

loopholes and deductions

while lowering rates.

Boehner called the GOP proposal a "credible plan" and said he hopes the administration will "respond in a timely and responsible

way." The offer comes after the administration urged Republicans to detail their proposal to cut popular benefit programs

like Medicare, Social Security and Medicaid.

"After the election I offered to speed this

up by putting revenue on the table and unfortunately the White House

responded

with their la-la land offer that couldn't pass the House, couldn't

pass the Senate and it was basically the president's budget

from last February," Boehner said Monday.

The Boehner proposal itself revives a host

of ideas from failed talks with Obama in the summer of 2011. Then, Obama

was willing

to discuss politically risky ideas such as raising the eligibility

age for Medicare, implementing a new inflation adjustment

for Social Security cost-of-living adjustments and requiring

wealthier Medicare recipients to pay more for their benefits.

Monday's Republican plan contains few specific and anticipates that myriad details will have to be filled in next year in

legislation overhauling the tax code and curbing the growth of benefit programs.

Obama did not respond to questions from reporters on his reaction to the Republican counteroffer or whether he had seen the

proposal. He was asked about it during an event in the Oval Office with the Bulgarian prime minister.

The clock is ticking closer to the end-of-year deadline to avert the fiscal cliff, which is a combination of expiring Bush-era

tax cuts and automatic, across-the-board spending cuts that are the result of prior failures of Congress and Obama to make

a budget deal.

Many economists say such a one-two punch could send the fragile economy back into recession.

GOP aides said their plan is based on one

presented by Erskine Bowles in testimony to a special deficit

"supercommittee" last

year — in effect a milder version of the highly controversial 2010

Bowles proposal that caused both GOP and Democratic leaders

in Congress to recoil.

Unlike Bowles' official 2010 plan, drafted with former GOP Sen. Alan Simpson, the version released Monday drops the earlier

endorsement of Obama's proposal to increase tax rates on family income exceeding $250,000 back to Clinton-era levels, with

the top rate jumping from 35 percent to 39.6 percent.

The White House insists Obama won't sign any measure that fails to increase tax rates on upper-income earners.

By GOP math, their plan would produce $2.2

trillion in budget savings over the coming decade: $800 billion in

higher taxes,

$600 billion in savings from costly health care programs like

Medicare, $300 billion from other proposals such as forcing

federal workers to contribute more toward their pensions and $300

billion in additional savings from the Pentagon budget and

domestic programs funded by Congress each year.

Boehner signaled in discussions with Obama in 2011 that he was willing to accept up to $800 billion in higher tax revenues,

but his aides maintained that much of that money would have come from so-called dynamic scoring — a conservative approach

in which economic growth would have accounted for much of the revenue. Now, Boehner is willing to accept the estimates of

official scorekeepers like the Congressional Budget Office, whose models reject dynamic scoring.

Under the administration's math, GOP aides

said, the plan represents $4.6 trillion in 10-year savings. That

estimate accounts

for earlier cuts enacted during last year's showdown over lifting

the government's borrowing cap and also factors in war savings

and lower interest payments on the $16.4 trillion national debt.

Last week, the White House delivered to

Capitol Hill its opening proposal: $1.6 trillion in higher taxes over a

decade, a

possible extension of the temporary Social Security payroll tax

cut and heightened presidential power to raise the national

debt limit.

In exchange, the president would back $600

billion in spending cuts, including $350 billion from Medicare and other

health

programs. But he also wants $200 billion in new spending for

jobless benefits, public works projects and aid for struggling

homeowners. His proposal for raising the ceiling on government

borrowing would make it virtually impossible for Congress to

block him going forward.

Republicans said they responded in closed-door meetings with laughter and disbelief.

The GOP plan is certain to whip up opposition from Democrats opposed to any action now on Social Security, whose defenders

say should not be part of any fiscal cliff deal. And Democrats also are deeply skeptical of raising the Medicare age.

Both ideas were part of negotiations between Boehner and Obama in the summer of last year.

In a letter to the president, Boehner and

six other House Republicans insisted that the November election that

returned Obama

to the White House and the GOP to majority control in the House

requires both parties to come together "on a fair middle ground."

"With the fiscal cliff nearing, our priority remains finding a reasonable solution that can pass both the House and Senate,

and be signed into law in the next couple of weeks," Republicans wrote.

One of the few things the White House and Capitol Hill Republicans can agree to is a framework that would make a "down payment"

on the deficit and extend all or most of the expiring Bush-era tax cuts but leave most of the legislative grunt work until

next year.

Signing the letter was Boehner, House

Majority Leader Eric Cantor, Majority Whip Kevin McCarthy and Rep. Paul

Ryan, the chairman

of the House Budget Committee and the unsuccessful GOP vice

presidential candidate. Rep. Dave Camp, chairman of the Ways and

Means Committee, Fred Upton, chairman of the Energy and Commerce

Committee, and Cathy McMorris Rodgers, the Republican Conference

chair, also signed the letter.

Earlier Monday, Obama answered questions on Twitter for an hour as the White House sought to keep up the pressure on the issue.

In response to a question about his

insistence on higher tax rates for the wealthiest earners, Obama said

that "high end tax

cuts do (the) least for economic growth & cost almost $1T." By

contrast, he said, "extending middle class cuts boosts consumer

demand & growth."

Obama said he was open to "smart cuts" in

spending, "but not in areas like R&D" and education, which "help

growth & jobs."

He also said he opposes spending cuts that would hurt the disabled

or other vulnerable groups.