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Liberal think tank offers deficit plan, pushes Obama on taxes
WASHINGTON |
WASHINGTON (Reuters) - A think tank with ties to the Obama administration laid out a deficit-reduction proposal on Tuesday, urging the president to go bold and seek more concessions from Republicans on tax hikes.
The plan emerges as the White House and Republicans remain at loggerheads over averting some $600 billion in tax hikes and federal spending cuts set to start taking effect early in 2013 known as the "fiscal cliff."
The $4.1 trillion deficit-cutting plan from the Center for American Progress seeks $1.8 trillion in new revenue, compared with Obama's call to raise $1.6 trillion.
It also calls for a 28 percent tax on capital gains income for high earners, whereas Obama has called for about a 24 percent tax rate, including new taxes from the healthcare overhaul.
Further, the proposal calls for taxing income from the wealthiest Americans at 39.6 percent, the default rate if the parties deadlock on a budget deal.
The think tank was founded by Democratic strategist John Podesta, a former chief of staff to President Bill Clinton. Its current president is Neera Tanden, Obama's top domestic policy adviser during his first campaign and a healthcare adviser during his first term.
Other Democratic luminaries who signed onto the Center for American Progress paper include former Treasury Secretary Larry Summers, who was an economic adviser to Obama during his first term, and Bill Daley, who served as Obama's chief of staff. Roger Altman, a Clinton-era deputy treasury secretary and co-founder of investment firm Evercore Partners, also signed on.
It is unclear what sort of impact the proposal will have on the tense negotiations. It is certain to fall flat with Republicans, who have called Obama's first offer an insult.
Republicans on Monday put their first bid on paper, calling for $800 billion in new revenue through a revamp of the tax code - but sticking to their pledge not to touch tax rates.
The Center for American Progress plan calls for replacing current standard exemptions and deductions with a "standard credit," and turning popular tax deductions into tax credits that would be limited.
(Reporting By Kim Dixon; Editing by Karey Wutkowski and Eric Walsh)
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did you even bother to read the article? how does 4.1 trillion in cuts end up being “more govt spending” to you? do you realize that over 75% of the deficit increases since 1980 have come under republican presidents? did you happen to notice that yesterday was the first time republicans have even offered up a plan?
• Achieve nearly $4 trillion in deficit reduction through 2020, more than any effort in the nation’s history.
• Reduce the deficit to 2.3% of GDP by 2015 (2.4% excluding Social Security reform), exceeding President’s goal of primary balance (about 3% of GDP).
• Sharply reduce tax rates, abolish the AMT, and cut backdoor spending in the tax code.
• Cap revenue at 21% of GDP and get spending below 22% and eventually to 21%.
• Ensure lasting Social Security solvency, prevent the projected 22% cuts to come in 2037, reduce elderly poverty, and distribute the burden fairly.
• Stabilize debt by 2014 and reduce debt to 60% of GDP by 2023 and 40% by 2035.
It seems that the starting point for future discussions should be their report and recommendations, and not by extreme Left or extreme Right organizations. If Obama truly ever wanted compromise, he would start off with his own hand-picked Commission.
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