24/7 Wall St.

Speaker of the House John Boehner has sent a letter to President Obama suggesting a more balanced $4.6 trillion approach to avert the coming fiscal cliff. The letter goes mostly back to the Simpson-Bowles framework. The letter criticises the doubling of tax revenue aims with 4-times the revenue versus spending cuts. Those spending cuts are also said to be effectively cancelled out if you include the stimulus efforts. Boehner has also gone on to say that the President’s proposal also removes any and all limits on federal borrowing. Boehner maintained that the latest proposal was neither balanced nor realistic.

Boehner maintained that the Bowles effort called for significant spending cuts as well as $800 billion in new revenue. The Bowles plan would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending.

In the letter, Boehner also said again that the new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates rather than via higher tax rates.

What is obvious more and more each day is that both sides are not anywhere close to reaching a deal. The president wants to keep up spending and increase taxes and the Republican plan seems unwilling to discuss notional tax rates. The fiscal cliff is coming and this is one where neither side seems to be softening up to the middle.

The DJIA is down 51 points at 12.974 so far on the day, down 100 points from before that recessionary ISM report came out at 10:00 a.m. EST this morning.

FULL LETTER IS HERE

JON C. OGG