Negotiations have hit a stalemate, but Sen. Mitch McConnell of Kentucky, the minority leader, provided the first GOP counteroffer to President Barack Obama's push for higher taxes on the wealthy. McConnell said Republicans would like to increase the Medicare eligibility age and ask wealthier Americans to pay higher Medicare premiums. He also suggested paring back the cost-of-living increases given to Social Security beneficiaries, a nonstarter for many Democrats.
"Those are the kinds of things that would get Republicans interested in new revenue," McConnell said in an interview Friday with The Wall Street Journal. "The nexus for us is: Revenue equals genuine entitlement eligibility changes."
Democrats have long bristled at changing the popular programs that primarily benefit seniors, but they have acknowledged that some reductions could be part of a broad deficit reduction deal. Social Security, however, remains off-limits for most Democrats.
"Social Security doesn't add a penny to the debt and should not be part of any deficit reduction talks," Sen. Richard Durbin of Illinois, the No. 2 Democrat in the Senate, said earlier in the week. "That is another topic for another time."
As talks hit an impasse late Friday, the partisan rhetoric on both sides soared. If no agreement is reached by year's end, ordinary Americans could face a $2,200 average tax hike in the new year, and automatic budget cuts could derail the fragile economy.
Obama has launched a high-profile campaign to court public opinion on his proposal to prevent the tax hike on middle- and lower-income Americans and allow rates to rise on earnings of more than $250,000 for couples or $200,000 for singles.
Republicans have rejected an increase in top tax rates but said they would be willing to consider new revenue elsewhere if Democrats agreed to steep budget reductions.
The White House had offered as much as $400 billion in future, long-term reductions to Medicare and Medicaid as part of a broader $4-trillion deficit reduction plan.
Republicans shot back that Obama's offer was not serious.
McConnell's decision to negotiate more publicly comes as Democrats have complained that Republicans had yet to put their own offer on the table -- a criticism Republicans dismissed, citing numerous bills approved by the GOP-led House to keep in place all tax rates, even for the wealthy, while replacing military budget cuts with reductions that would hit domestic accounts.
Missing from McConnell's offer were the more ambitious safety-net changes proposed by Rep. Paul Ryan, R-Wis., who was Republican Mitt Romney's vice presidential running mate.
Ryan had called for turning Medicare into a voucher-like program by giving seniors a fixed amount of money to pay for premiums for Medicare or other private insurance. Ryan's views on any deal with the White House could prove influential in swaying the conservative wing of the party.
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