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White House rejects GOP plan: Tax rates for top 2 percent must go up (+video)

It did not take long for the White House to dismiss the Republican deficit-cutting proposal, which raised revenues by capping deductions. Now both sides have laid down their markers.

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In a way, the Republicans have done what the White House wanted: They have put out their own plan in response to President Obama’s proposal last week for deficit reduction.

But it didn’t take long for the White House to dismiss the GOP offer, released Monday afternoon by Speaker John Boehner and other House Republican leaders. Not only does the Republican plan call for only half the revenue the president wants – $800 billion over 10 years versus $1.6 trillion – it does so by limiting tax breaks, not by raising tax rates on the most wealthy.

The Boehner plan also includes a $1.4 trillion cut in spending, for a total of $2.2 trillion of deficit reduction over the next 10 years. The cuts include reductions in federal health-care spending on programs such as Medicare, Medicaid, and the Affordable Care Act. Savings are also derived by lowering cost-of-living increases in Social Security.

“The Republican letter released today does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill,” White House communications director Dan Pfeiffer said in a statement. “Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close, or which Medicare savings they would achieve.”

Independent analysts who have looked at “plans like this one,” Mr. Pfeiffer said, have concluded that taxes will have to go up to pay for lower rates for “millionaires and billionaires.”

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