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Interview with Erskine Bowles

By The NewsHour, The NewsHour - December 3, 2012

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GWEN IFILL: House Republicans today offered their counteroffer to the president's plan for a deal both sides say is needed to avoid year-end tax increases.

The move was the latest volley in an increasingly tense face-off between the two branches of government.

With 28 days left to come to a deal on the nation's fiscal cliff, the White House is holding firm on its proposal to raise taxes on the wealthy.

Spokesman Jay Carney:

JAY CARNEY, White House: The obstacle remains at this point the refusal to acknowledge by Republican leaders that there is no deal that achieves the kind of balance that is necessary without raising rates on the top 2 percent wealthiest Americans. The math simply doesn't add up.

GWEN IFILL: The White House proposes raising $1.6 trillion in taxes over 10 years, imposing higher rates on those making more than $250,000 a year.

In a letter sent to the White House today, speaker of the House John Boehner rejected the president's approach, writing that Republicans "cannot in good conscience agree to this approach, which is neither balanced nor realistic."

His counteroffer, save $2.2 trillion by among other things raising $800 billion in new revenues. The plan would also raise the future eligibility age for Medicare and alter Medicaid to save another $600 billion. The Republican plan wouldn't increase tax rates for the wealthy.

The president is campaigning for his plan, taking questions on Twitter today and releasing this new Web video.

PRESIDENT BARACK OBAMA: Under my plan, first of all, 98 percent of folks who make less than $250,000, you wouldn't see your income taxes go up a single dime. All right?

(CHEERING AND APPLAUSE)

BARACK OBAMA: Because you're the ones who need relief.

GWEN IFILL: Treasury Secretary Timothy Geithner met with congressional leaders last week and pressed the administration's case in a series of talk show appearances this weekend.

TREASURY SECRETARY TIMOTHY GEITHNER: Rates are going to go up, have to go up on the wealthiest Americans. Those rates are going to have to go up. That's an essential part.

There's no possibility that we're going to find a way to get our fiscal house in order without those tax rates going back up. There's no path to an agreement that doesn't involve Republicans acknowledging that rates have to go up for the wealthiest Americans.

GWEN IFILL: But Boehner, also on a Sunday talk show appearance, pushed back.

REP. JOHN BOEHNER R-Ohio: I was just flabbergasted. I looked at him and said, you can't be serious.

CHRIS WALLACE, "FOX News Sunday": Where are we now?

JOHN BOEHNER: Right now, I would say we're nowhere, period. We're nowhere. We have put a serious offer on the table by putting revenues up there to try to get this question resolved, but the White House has responded with virtually nothing. They have actually asked for more revenue than they have been asking for the whole entire time.

GWEN IFILL: The White House also proposed ending congressional control over the nation's debt limit. Boehner called that silliness.

Mr. Boehner and other congressional leaders will head to the White House tonight for a holiday party, but there are no formal negotiations scheduled for the rest of this week. The president makes his case to state leaders tomorrow when several governors visit the White House.

Late this afternoon, the White House rejected today's Republican counteroffer, saying it doesn't meet the test of balance.

One man who has been searching for that balance is Erskine Bowles, who, with Alan Simpson, is co-author of a deficit reduction plan that neither side has previously embraced. I spoke with him a short time ago.

Erskine Bowles, thank you so much for joining us.

Late this afternoon, John Boehner, the House speaker, sent a letter to the White House in which he said he needed to find different middle ground on this fiscal cliff issue.

And he particularly cited your report, which he described as providing imperfect, but fair middle ground as a way of breaking this political stalemate.

He's saying, if only the president would adopt your approach, that maybe this stalemate could be broken. What do you think about that?

(LAUGHTER)

ERSKINE BOWLES, National Commission on Fiscal Responsibility And Reform: Well, I haven't seen the letter, as I think you know.

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