Today Speaker Boehner made what he wants to call a "counter-offer" in the negotiations about the so-called "fiscal cliff." And the White House summarily rejected it.
A reasonable critique of the offer is that it did not contain any specifics. But beyond that, its interesting to place Boehner's plan alongside what will happen if we go off the "cliff."
When it comes to new revenues, Boehner is suggesting closing unspecified loopholes and deductions to get $800 billion.
If Congress does nothing and we go off the cliff, ALL the Bush tax cuts end - producing an additional $5 trillion in revenue.
On spending cuts, both Boehner's plan and going over the "cliff" will produce $1.2 trillion in savings. But what is important is where it comes from.
Once again, the Speaker is not saying where the cuts will/won't come from.
Going over the cliff means that $600 billion in cuts comes from defense spending and $600 billion comes from domestic spending - with Social Security, Medicaid, unemployment, programs for low income families, and civilian/military retirement protected. Medicare cuts would be limited to 2% and can only come from providers (not beneficiaries).
If that's the best the Speaker can do - I'd say, "hold on to your hats and off the cliff we go!"
A more likely scenario is what some folks are calling the doomsday plan where Republicans allow a vote on extending the tax cuts for those who make less than $250,000 and leave the rest for next year. That means President Obama wins on the tax cuts and the spending cuts to both defense and domestic programs would go into effect on Jan. 1st - leaving him some negotiating leverage for the next round.
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