Correction: The original version of this story gave an incorrect figure for the savings in Senate Democrats' deficit proposal. The projected savings are $3 trillion over 10 years.
House Speaker John Boehner’s economic staff on Thursday branded the Senate Democratic bid to reduce the national deficit by $3 trillion over 10 years “not a serious proposal.” The Ohio Republican's staff also said the Democrats' plan is marred by unrealistic defense cuts and politically and economically toxic tax increases.
“Republicans have been willing to discuss new revenues, but this offer is rooted in unacceptable tax increases, which would have a negative impact on the economy and jobs,” states the memo, distributed Thursday to all House GOP leadership offices and to the 12 members of the so-called super committee.
The Senate Democrats' plan, leaked on Wednesday, seeks more than $1 trillion in new tax revenues. The mandate of the super committee is to come up with at least $1.2 trillion in savings over 10 years. Republicans rejected the Democrats' approach mere hours after it surfaced.
The Boehner memo seems to lay the foundation for GOP speeches in opposition to the Senate Democratic position—or any other plan that materially raises income-tax rates. It also allows Boehner to influence deliberations of the super committee's six Republicans (three from the House and three from the Senate) without personally denouncing the Senate Democratic plan. Six Democrats (three each from the House and Senate) also serve on the super committee, which has until Nov. 23 to produce deficit-reduction legislation. If the committee fails, $1.2 trillion in across-the-board spending cuts will begin in January.
If a simple majority of the super committee agrees, the legislation would come to the House and Senate floors for straight up-or-down votes with no opportunity for amendments. Despite this unprecedented level of procedural and political protection, the super committee appears just as stymied by the underlying political conflict over spending and tax increases as every other committee that’s tried to tame the nation’s deficit dragon.
Here is the Boehner memo to House Republican leaders. ("JSC" refers to the Joint Select Committee, the full name of the super committee is the Joint Select Commitee on Deficit Reduction).
Initial Policy Concerns About JSC Democrats’ Offer
Overall: Not a serious proposal. Republicans have been willing to discuss new revenues, but this offer is rooted in unacceptable tax increases, which would have a negative impact on the economy and jobs. Even Secretary Panetta says further defense cuts not sustainable.
- Tax increase matches President Obama’s budget request, which no Democrat voted for in the Senate, so that does not represent a compromise.
- Tax revenue number of $1.3 trillion is far more than Obama & Boehner ever discussed (a ceiling of $800 billion)—$1.3 trillion is at least 62 percent more than that number.
- Boehner-Obama discussed an increase in revenue resulting not from tax increases, but from the economic growth that would follow comprehensive tax reform.
- The Democrats’ proposal includes $200 billion in defense cuts below those already enacted in the BCA. Secretary Panetta says these additional cuts are not achievable.
- Federal government is projected to spend more than $4 trillion on Medicaid over the next 10 years—growing nearly 10 percent annually. The Democrats’ proposal only trims the program by $50 billion, with no additional flexibility for states, so the Democrats’ savings amount to only one percent of projected future costs.
President’s Stimulus plan:
- The Democrats’ proposal includes the President’s jobs plan (minus his specific tax hikes). While some of these proposals merit discussion, such as the payroll tax credit, other ‘stimulus’ measures such as the direct aid to states are opposed by most Republicans. The purpose of the Joint Select Committee is to cut spending, not to increase it. Some of these proposals have already failed and don’t have majority support in the Senate.
- The Democrats’ proposal for tax increases would have a negative impact on the economy and jobs; it’s not a serious effort at compromise.