Negotiations on a deal to avoid the fiscal cliff got a jump-start on Monday with House Republicans offering a counter-proposal to President Barack Obama, but continuing to reject his call for higher tax rates on the wealthy.
The GOP proposal would result in $2.2 trillion in deficit savings over the next decade, including $800 billion from tax reform, $600 billion from Medicare reforms and other health savings, and $600 billion in other spending cuts, House GOP leadership aides told reporters.
John Boehner called it a "credible plan that deserves serious consideration by the White House."
The move followed a weekend of accusations by both sides that the other was not serious about reaching a deal to avoid the automatic tax hikes and spending cuts scheduled to take effect January 1 -- what is known as the fiscal cliff that economists say will damage U.S. growth.
There was no immediate response to the Republican plan, which House Republican leaders sent to Obama in a letter on Monday afternoon.
Earlier, White House spokesman Jay Carney made clear that Obama would reject any proposal that extended tax cuts from the Bush administration to the wealthiest Americans.
"He will not sign a bill that extends those tax rates for the top 2%," Carney told reporters. "We can't afford it. It is not a wise economic policy. It's not wise fiscal policy and it would defeat the principle of balance that he has embraced so clearly throughout these negotiations."
The GOP move came as pressure increased for Boehner to hold a vote in the House on a Senate measure that would extend the Bush-era tax cuts for income up to $250,000 for families while allowing rates to return to higher levels of the 1990s on the rest.
Fresh off his re-election victory, Obama demands House passage of the Senate measure, which he says would avoid a fiscal cliff tax hike for 98% of Americans.
A central theme of Obama's first term and re-election campaign, the plan would increase revenue by almost $1 trillion over 10 years, providing a significant portion of the $4 trillion in overall deficit reduction sought by both sides.
However, Republicans led by Boehner object to any increase in tax rates, even for higher levels of income earned by 2% of Americans.
Instead, the counter-offer Monday proposed $800 billion in deficit savings through tax reform, including raising an unspecified amount of revenue by eliminating tax deductions and loopholes.
The GOP letter noted that the new offer was based on a framework proposed last year by Erskine Bowles, a Democrat and one-time White House chief of staff who co-chaired a deficit reduction commission appointed by Obama in 2010.
"This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform," the letter said. "Indeed, the Bowles plan is exactly the kind of imperfect, but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs. We believe it warrants immediate consideration."
The tax fight continues to stymie congressional negotiations on reducing chronic federal deficits and debt. This time, the public brinksmanship comes with a looming year-end deadline for the fiscal cliff.
Without a deal, taxes for everyone go up on January 1 when the Bush tax cuts are set to expire.
For the GOP, an agreement must include major reforms of entitlement programs such as the Medicare and Medicaid government-run health care programs for senior citizens, the disabled and the poor.
On Sunday, House Democratic leader Nancy Pelosi threatened a procedural move that would, at the least, require Republicans to publicly state their opposition to avoiding the fiscal cliff tax hike on everyone.
"If Speaker Boehner refuses to schedule this widely-supported bill for a vote, Democrats will introduce a discharge petition to automatically bring to the floor the Senate-passed middle class tax cuts," Pelosi said in a statement. "We must find a bold, balanced and fair agreement to avoid the fiscal cliff. The clock is ticking and stalemates are a luxury we cannot afford."