Republicans signal willingness to move on taxes to cut deficit; Dems reject offer

UPDATED 4:21 p.m. ET

After weeks of wrangling over taxes, Republicans on the panel tasked with creating a plan to cut the deficit by Thanksgiving have signaled a willingness to shrink the government's shortfall by both raising the amount of money sent to federal coffers and cutting spending.

According to a Republican aide with knowledge of closed-door negotiations of the so-called supercommittee, the plan would lower tax rates for all income levels in exchange for limiting some key deductions that could bring in about $250-300 billion to the Treasury. In the past, Republicans have insisted that only spending cuts should be considered, while Democrats have pushed for both spending cuts and tax hikes for the wealthy.

The plan would also make permanent tax cuts enacted under President George W. Bush and extended until 2013 by President Obama last year. Democrats have adamantly opposed making those tax cuts permanent.

A senior Democratic source with knowledge of the GOP offer said that Republicans would also lower the top tax rates from 35 percent to 28 percent. Democrats told Republicans that plan is unacceptable given the spending cuts Republicans want that would cut Medicaid, Social Security and raise the eligibility age for Medicare in exchange for such perks for the rich.

"We would need a substantial revenue number to justify what they're proposing on the spending side" the aide said.

Republican and Democratic members of the panel met separately Tuesday morning. Leaving the Democratic meeting, Massachusetts Sen. John Kerry said members have "made a little bit of progress, but it's not enough in our judgment, yet." He said "We have some distance to go."

Another Democratic aide with knowledge of the Republican offer called it a "joke" and said that "Democrats have summarily rejected the proposal as fundamentally unserious."

The aide said "only Republican math would spend trillions in tax breaks for the wealthy and others and not actually save any money."

The idea, which was floated by Sen. Pat Toomey (R-PA), according to aides, was outright rejected by tax cut champion, and head of Americans for Tax Reform, Grover Norquist.

In a tweet Tuesday morning, Norquist said "Supercommittee idiot idea: raise revenue by capping tax exemptions. That was called the Alternative Minimum Tax/AMT..AMT two, anyone?"

Norquist was referring to the alternative minimum tax, which was designed to stop the wealthy from taking so many deductions that they would not pay any taxes, but now threatens the middle class each year unless Congress intervenes.

It was unclear when the full committee would meet again and what the next steps forward would be. Lawmakers have largely met in smaller groups which aides said were more productive.

Members are running out of time, however, with the committee's deadline just 15 days away.

Update 9:15 p.m. ET: Democrats informed the Super Committee Republicans this evening they could not accept this latest proposal according to a senior Democrat with knowledge of the Super Committee negotiations. Democrats did not offer a counter proposal.

"It's an offer we couldn't take, there's no there - there," a senior Democrat told CBS News Capitol Hill producer John Nolen.

[jimbom121]

So the GOP offers $300b in tax increases in exchange for $4t in tax cuts (over the next 10 years). ok

[noloyalisti]

Hopefully after this year, there will be no chance for any Republicon candidate to be elected or appointed by the corporations to government office. They have become an obsolete, extremist organization that wants radical and damaging changes in America.

The Republicons have clearly shown everyone that they hate most of the people in America and especially the 99% of us who cannot afford to hire corporate lobbyists.

[dante805]

Imagine that DEMoncats not wanted to say YES. These fools like Harry Reid and Dick Durbin need a labotomy. SAVE the USA and throw these clowns out of office. NO AMNESTY NO MORE SPENDING NO CAP AND TAX NO TAX INCREASES . CUT CUT CUT.

[jimbom121]

Imagine that...the GOP adding $4T to the deficit by making the Bush tax cuts permanent.

[lami987]

Go back to Clinton's tax structure. It produced the only balanced budget and budget surplus in decades. According to congressional budget office our debt would be eliminated in 2009 if no changes were made to our budget at that time. But Bush tax cuts spoiled it all and we ended up in this mess. History tells us every single tax cut only lead us to more debt and budget deficit. But republicans ignore those facts and pretend it is not there to see. Instead they continue to obey their boss, Norquist, and not We The People.

[RobAla]

Actually, it was Gingrich's tax structure and President Clinton was smart enough to go with it after Democrats had been clobbered in the 1994 election. President Clinton came in with similar massive government ambitions of President Obama. President Clinton attempted to nationalize health care in 1993, and voters were so angry that they gave control of the House to Republicans for the first time in 40 years. Gingrich put the brakes on President Clinton, and the President was smart enough to work with him.

We are not seeing this in President Obama. President Obama and other progressives have imposed damaging expenses and regulations on private sector business that is crippling the jobs market. Public sector (government) jobs depend on tax revenue from a healthy private sector to obtain tax revenue, and it is not there. Nevertheless, President Obama has continued to expand the government and public sector jobs - so we go deeper and deeper in debt. Now we have a staggering $14.4 trillion national debt, and it is still rising. We have to stop this nonsense. We have to repeal the oppressive expenses and regulations imposed on business over the last 3 years, and we have to reduce the federal government in size and scope to a level the American taxpayer can afford.

[realist51]

Robala: So whats your point about it being "Gingrich's" idea? If it was then lets go back to that "Republican tax rate" and pay the republicant bills! instead of stuffing them down your grand children's throats .As far as the healthcare at the time it again wasn't voters that rejected the bill it was republicant"s and the current HCR is based on republicant policy from those negotiations and from republicant front runners Mitt Romney s success.As far as your statement on regulations there is nothing to back this up at all a recent finding is that what is hurting business's was lack of demand for there products regulations have had little to no impact on them, The debt, Haarr! You seem to forget that over half of the debt is from republicant policies from 2001 to 2008 what with two tax cuts, Money borrowed from china to cover those. Two unfunded wars, with money borrowed from china because of tax cuts Unfunded medicare part "D" unfunded no child left behind. And where did the President ever "Veto a republican legislation? He caved in on the HCR by eliminating the single payer and public options. the republicans held the unemployed hostage to extend the failed bush tax cuts and now again want to make them permanent for 250 billion in tax code adjustments when they could return to "Gingrich" tax rates and eliminate the tax loophole and increase revenue's not only by the 250 billion but buy another trillion over ten years. Never had these problems in the sixties when tax rates were at 70+% . What the foolish republicans don't seem to understand is that if we raise the rates and pay down on the debt in ten or fifteen years we could once again lower rates It has been done in the past it can be done again in the future.

[RobAla]

This should be the last offer Republicans make to Democrats on any tax increases. I am disappointed that they made the offer in the first place, and in the second place NO INCREASE IN TAXES IS ENOUGH FOR TODAY'S DEMOCRATS. This is not the same Democrat party of John Kennedy - he was for reducing taxes.

We have to get a serious handle on federal spending, and the we must reduce the scope and size of the federal government to a level that the American taxpayer can afford. We need big changes in Washington DC. We can not afford to conduct business as usual with a outrageous $14. 4 trillion national debt and 14 million Americans out of work. We must reduce government expenses and regulation that President Obama and other progressives have imposed on the private sector jobs market, and we must turn this economy around.

[jimbom121]

Yeah...imagine offering 300b in tax increases for $4T in tax cuts.

[hhandyman]

As soon as congress votes to tie The Congressional pension to the same rules and moves all of the funding for it to the Social Security trust fund and set a basis for any pension to people with a net worth of under 1 million in liquid asserts whether in trust funds or held int their name to qualify for any return of pension fees regardless ( a needs basis level) then it would be fair to allow them funding Regardless of party affiliation.

[rebasfla]

A real man, a 'real legislator', would pay little attention to Norquist and work to promote a
compromise for increased revenue and budget cuts both. Republicans will lose the House
and some Senate seats for they are not acting as patriots.

[MTATL67]

Congressional Republicans are deluding themselves if they think that they will not be held accountable for obstructing the recovery. Many of them including those members that belong to the extremist group called the Tea party will not be coming back in 2013. I think a valuable lesson is that extremism and obstructionism does not work in the Halls of Congress.