Liberal US think tank offers deficit plan, pushes Obama on taxes

Reuters Middle East

WASHINGTON, Dec 4 (Reuters) - A think tank with ties to the

Obama administration laid out a deficit-reduction proposal on

Tuesday, urging the president to go bold and seek more

concessions from Republicans on tax hikes.

The plan emerges as the White House and Republicans remain

at loggerheads over averting some $600 billion in tax hikes and

federal s p ending cuts set to start taking effect early in 2013

known as the "fiscal cliff."

The $4.1 trillion deficit-cutting plan from the Center for

American Progress seeks $1.8 trillion in new revenue, compared

with Obama's call to raise $1.6 trillion.

It also calls for a 28 percent tax on capital gains income

for high earners, whereas Obama has called for about a 24

percent tax rate, including new taxes from the healthcare


Further, the proposal calls for taxing income from the

wealthiest Americans at 39.6 percent, the default rate if the

parties deadlock on a budget deal.

The think tank was founded by Democratic strategist John

Podesta, a former chief of staff to President Bill Clinton. Its

current president is Neera Tanden, Obama's top domestic policy

adviser during his first campaign and a healthcare adviser

during his first term.

Other Democratic luminaries who signed onto the Center for

American Progress paper include former Treasury Secretary Larry

Summers, who was an economic adviser to Obama during his first

term, and Bill Daley, who served as Obama's chief of staff.

Roger Altman, a Clinton-era deputy treasury secretary and

co-founder of investment firm Evercore Partners, also signed on.

It is unclear what sort of impact the proposal will have on

the tense negotiations. It is certain to fall flat with

Republicans, who have called Obama's first offer an insult.

Republicans on Monday put their first bid on paper, calling

for $800 billion in new revenue through a revamp of the tax code

- but sticking to their pledge not to touch tax rates.

The Center for American Progress plan calls for replacing

current standard exemptions and deductions with a "standard

credit," and turning popular tax deductions into tax credits

that would be limited.

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