Democrats and Republicans have exchanged formal budget proposals in recent days as they continue to joust over tax increases, spending cuts and how to avoid the year-end “fiscal cliff” that could throw the country into another recession.
The fiscal cliff is a combination of automatic spending cuts and expiring tax breaks that, under current law, will all take effect at the end of the year. Elected officials in both parties say they want to avoid the cliff, and some parts of it were never intended to actually take effect.
Congress and the President need to move quickly to replace the cliff with a more responsible “down payment” on deficit reduction while establishing a framework for a more comprehensive, long-term deficit-reduction effort. The Concord Coalition also urges officials in both parties to pursue bipartisan cooperation and compromise.
Last week the administration presented a budget plan to Republicans that included spending cuts, some additional stimulus spending and roughly $1.6 trillion in additional tax revenue over 10 years. Republicans dismissed the plan as unreasonable and too dependent on more tax revenue.
On Monday House Republican Leaders released their own budget plan, describing it as a “stark contrast” to what the President had suggested. Republicans said their plan would raise $800 billion in new tax revenue -- although not through higher rates -- while making more extensive spending cuts than Obama had proposed.
The White House quickly rejected the Republican plan, saying that it includes “nothing new” and “fails to meet the test of balance.”
House Republicans said their proposal “centered around a middle-ground approach” that was suggested last year by Erskine Bowles, a co-chair of the National Commission on Fiscal Responsibility and Reform. Bowles said Monday, however, that “it will be necessary for both sides to move beyond their opening positions” to reach a deal.