House Proposes Fiscal Cliff Counteroffer

Washington- A ‘Fiscal Cliff’ showdown erupts in Congress on Monday, when a Republican $2.2 trillion budget deficit reduction proposal involved cutting back on federal taxes that the Democrats have been trying to raise.

The ‘Fiscal Cliff’ will transpire by the end of 2012 and early 2013 when the Budget Control Act of 2011 is set to take effect. Democrats and the Obama administration seek to raise federal tax revenues to $1.6 trillion in 10 years by terminating existing federal tax cuts and increasing federal tax rates- especially the higher income tax brackets of the wealthy.

This proposal is countered with the Republican representatives’ own proposal that plan to raise $800 billion of federal tax revenues not by increasing tax rates but by limiting income tax deductions and cutting down federal tax rates instead. The Republican counteroffer also aims to cut down federal spending by $1.2 trillion in the next 10 years.

The White House calls this counteroffer unbalanced and that it “sticks the middle class with the bill.” A statement from the White House says that the president asks the wealthiest to pay the highest federal taxes because he is unwilling “to compromise on the principles of fairness and balance.”

Meanwhile, several federal tax experts and statesmen have already taken sides on the brewing debate. Senate Minority Leader Mitch McConnell, for instance, believes that the new Republican offer strives to provide a “realistic approach” in solving the country’s economic problems. However, a lot of groups still want a more specific GOP from both parties.