WASHINGTON (MNI) – The following is the text of a letter from the House
Republican leadership to President Barack Obama outlining the GOP offer in the
fiscal cliff negotiations:

Dear Mr. President,

After a status quo election in which both you and the Republican majority
in the House were reelected, the American people rightly expect both parties to
come together on a fair middle ground and address the nation’s most pressing
challenges.

To that end, shortly after the election, we presented you with a balanced
framework for averting the fiscal cliff by coupling spending cuts and reforms
with new tax revenue. We then welcomed Secretary Geithner to the Capitol on
November 29 with every expectation that he would layout a similarly reasonable
path.

Regrettably, the proposal he outlined on behalf of your Administration
contains very little in the way of common ground. The proposal calls for $1.6
trillion in new tax revenue, twice the amount you supported during the campaign.
The proposal also includes four times as much tax revenue as spending cuts, in
stark contrast to the “balanced approach” on which you campaigned. While
administration officials are claiming that this proposal contains 2.5 dollars of
spending cuts for each dollar in new revenue, counting as part of this ratio
previously enacted savings – as if these were new spending reductions – only
confuses the public debate. What’s worse, the modest spending cuts in this offer
are cancelled out by the additional ‘stimulus’ measures the Administration is
requesting. And, this proposal would remove any and all limits on federal
borrowing.

We cannot in good conscience agree to this approach, which is neither
balanced nor realistic. If we were to take your Administration’s proposal at
face value, then we would counter with the House-passed Budget Resolution. It
assumes an overhaul of our tax code with revenue remaining at historically
normal levels and proposes structural reforms to preserve and protect the
Nation’s entitlement programs, ensuring they are sustainable for the long-term
rather than continuing to grow out of control. Some of its key reforms include:

* The House-passed Budget Resolution assumes enactment of structural
Medicare reform that offers future beneficiaries guaranteed coverage options,
including a traditional fee -for-service Medicare plan. This proposal is based
on recent bipartisan efforts and would provide greater support for the poor and
the sick and less support for the wealthy. We achieve these reforms in Medicare
without affecting current seniors or those nearing retirement. This would slow
the projected explosive spending growth in this program and eventually maintain
Medicare spending as a share of the economy at 4.75 percent, thus saving the
program for future generations.

* The House-passed Budget Resolution reforms Medicaid and provides states
with greater flexibility to better deliver health security to beneficiaries,
saving the federal government nearly $800 billion over 10 years.

* Separate from savings in our proposal for the 2010 health care law, the
House-passed Budget Resolution envisions hundreds of billions in savings in
other mandatory spending, including reforms to Federal employee compensation and
the Supplemental Nutrition Assistance Program.

These reforms are, in our view, absolutely essential to addressing the true
drivers of our debt, and we will continue to support and advance them. At the
same time, mindful of the status quo election and past exchanges on these
questions, we recognize it would be counterproductive to publicly or privately
propose entitlement reforms that you and the leaders of your party appear
unwilling to support in the near-term.

With the fiscal cliff nearing, our priority remains finding a reasonable
solution that can pass both the House and the Senate, and be signed into law in
the next couple of weeks. The best way to do this is by learning from and
building on the bipartisan discussions that have occurred during this Congress,
including the Biden Group, the Joint Select Committee, and our negotiations
leading up to the Budget Control Act.

For instance, on November 1 of last year, Erskine Bowles, the co-chair of
your debt commission, presented the Joint Select Committee with a middle ground
approach that garnered praise from many fiscal watchdogs and nonpartisan
experts. He recommended that both parties agree to a balanced package that
includes significant spending cuts as well as $800 billion in new revenue.
Notably, the new revenue in the Bowles plan would not be achieved through higher
tax rates, which we continue to oppose and will not agree to in order to protect
small businesses and our economy. Instead, new revenue would be generated
through pro-growth tax reform that closes special-interest loopholes and
deductions while lowering rates. On the spending side, the Bowles recommendation
would cut more than $900 billion in mandatory spending and another $300 billion
in discretionary spending. These cuts would be over and above the spending
reductions enacted in the Budget Control Act. This is by no means an adequate
long-term solution, as resolving our long-term fiscal crisis will require
fundamental entitlement reform. Indeed, the Bowles plan is exactly the kind of
imperfect, but fair middle ground that allows us to avert the fiscal cliff
without hurting our economy and destroying jobs. We believe it warrants
immediate consideration. If you are agreeable to this framework, we are ready
and eager to begin discussions about how to structure these reforms so that the
American people can be confident that these targets will be reached.

Again, the American people expect their leaders to find fair middle ground
to address the nation ‘s most pressing challenges. To achieve that outcome, we
respectfully request that you respond to this letter in a timely fashion and
hope that you will refrain from any further action that would undermine
good-faith efforts to reach a reasonable and equitable agreement in this
critical matter.

Sincerely,
(signed)

John Boehner
Speaker

Eric Cantor
Majority Leader

Kevin McCarthy
Majority Whip

Cathy McMorriss Rodgers
Republican Conference Chairman

David Camp
Chairman, Committee on Ways and Means

Paul Ryan
Chairman, Committee on the Budget

–MNI Washington Bureau; tel: +1 202-371-2121; email: hscott@mni-news.com

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