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.