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.