House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, an immediate new round of stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits.
The proposal, loaded with Democratic priorities and short on detailed spending cuts, was likely to meet strong Republican resistance. In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced $400 billion in savings from Medicare and other entitlements, to be worked out next year, with no guarantees.
He did propose some upfront cuts in programs like farm price supports, but did not specify an amount or any details. And senior Republican aides familiar with the offer said those initial spending cuts might well be outnumbered by upfront spending increases, including at least $50 billion in infrastructure spending, mortgage relief, an extension of unemployment insurance and a deferral of automatic cuts to physician reimbursements under Medicare.
“The Democrats have yet to get serious about real spending cuts,” Mr. Boehner said after the meeting. “No substantive progress has been made in the talks between the White House and the House over the last two weeks.”
Beneath the outward shows of frustration and rancor, Democrats said a deal could still come before hundreds of billions of dollars in automatic tax increases and spending cuts threaten the fragile economy next year. Senator Charles E. Schumer, Democrat of New York, pointed to conservative Republicans who have publicly suggested that the House quickly pass Senate Democratic legislation extending the expiring tax cuts for income below $250,000.
“All you have to do is just listen to what’s happening out there, and you realize there is progress,” he said.
But publicly, the leaders of neither side were giving an inch. And Republican aides said the details of the White House proposal pointed to a re-elected president who believes he can bully Congress.
“They took a step backward, moving away from consensus and significantly closer to the cliff,” said Senator Mitch McConnell of Kentucky, the Republican leader.
I say up the amount, let the economy burn under Obama.