In an offer relayed by co-chair Patty Murray, Democrats privately agreed to the top-line figures in a Republican proposal to cut deficits by about $1.5 trillion over a decade -- $400 billion from revenue; $876 billion, including $225 billion from Medicare and $25 billion from Medicaid, in spending cuts.
But they were miles apart on the underlying specifics, such as a Democratic demand to put $700 billion in unspent war funds toward a jobs program; a long-term plan to assure Medicare doctors don't experience deep automatic pay cuts; and a patch to protect upper-middle class earners from being hit by the Alternative Minimum Tax.
Parts of the GOP proposal, according to the aide, were unacceptable to Democrats -- specifically provisions that would count higher fees and Medicare premiums as tax revenue; increase the Medicare retirement age; reduce Social Security benefits by changing how the program calculates cost of living adjustments; and make the Bush tax cuts permanent.
Republicans objected strenuously to Dems' position on the Bush tax cuts and on how to allocate the unspent war funds. The GOP argued for a long-term AMT patch and a one year Medicare "doc fix."
Michael Steel, a spokesman for House Speaker John Boehner, dismissed the development. "There have been a number of discussions among different members of the Joint Select Committee on Deficit Reduction," Steel said. "This particular conversation was a step backwards because it would lock in the largest tax hike in history -- at least $800 billion -- and then add an additional $400 billion in job-killing tax hikes without pro-growth tax reform, plus more than $300 billion in 'stimulus' spending."
Setting aside the rhetoric, the differences are enormous. The GOP's proposal to raise the Medicare retirement age would cut government costs by about $125 billion -- more than half of the total agreed upon savings. Though it's unclear where else in Medicare Democrats proposed to find those savings, Republicans have typically rejected similarly big savers like prescription drug negotiation and reimportation.
Democrats say talks continued after this offer but petered off Monday early this week ... and haven't really resumed in earnest since.