The fiscal cliff is a combination of expiring Bush-era tax cuts and automatic, across-the-board spending cuts that are the result of prior failures of Congress and Obama to make a budget deal.
The Republican proposal, a 10-year $2.2 trillion blueprint, comes after the president opened the negotiation by issuing a plan last week. Speaker of the House John Boehner (R-Ohio) said the president's proposal was met with laughter and disbelief by GOP colleagues.
Monday's GOP plan calls for raising the eligibility age for Medicare and lowering cost-of-living increases for Social Security benefits. The plan proposes to raise $800 billion in higher tax revenue, but would maintain tax cuts from George W. Bush's presidency that are set to expire at the end of this year. The White House declared the Republicans still weren't ready to "get serious."
The White House complained the latest offer was still short on details about what loopholes would be closed or deductions eliminated, and it insisted that any compromise include higher tax rates for upper-income earners.
Obama's plan calls for retaining the tax cuts for all tax brackets, but would raise rates on incomes of $250,000 and higher. Income up to $250,000 would not see increased tax rates, but every dollar over that figure would see an increase from 35 percent to 39.6 percent, the levels that were in place during Bill Clinton's presidency.
Republicans dismiss any tax-rate increases. The Republican plan contends increased revenue toward debt reduction would come from lowering tax rates and closing loopholes and deductions.
Boehner called the GOP proposal a "credible plan" and said he hopes the administration will "respond in a timely and responsible way." The offer comes after the administration urged Republicans to detail their proposal to cut popular benefit programs like Medicare, Social Security and Medicaid.
"After the election I offered to speed this up by putting revenue on the table and unfortunately the White House responded with their la-la land offer that couldn't pass the House, couldn't pass the Senate and it was basically the president's budget from last February," Boehner said Monday.
Monday's Republican plan contains few specific and anticipates that myriad details will have to be filled in next year in legislation overhauling the tax code and curbing the growth of benefit programs.
By GOP math, their plan would produce $2.2 trillion in budget savings over the coming decade: $800 billion in higher taxes, $600 billion in savings from costly health care programs like Medicare, $300 billion from other proposals such as forcing federal workers to contribute more toward their pensions and $300 billion in additional savings from the Pentagon budget and domestic programs funded by Congress each year.
Boehner signaled in discussions with Obama in 2011 that he was willing to accept up to $800 billion in higher tax revenues, but his aides maintained that much of that money would have come from so-called dynamic scoring - a conservative approach in which economic growth would have accounted for much of the revenue. Now, Boehner is willing to accept the estimates of official scorekeepers like the Congressional Budget Office, whose models reject dynamic scoring.
Under the administration's math, GOP aides said, the plan represents $4.6 trillion in 10-year savings. That estimate accounts for earlier cuts enacted during last year's showdown over lifting the government's borrowing cap and also factors in war savings and lower interest payments on the $16.4 trillion national debt.
Last week, the White House delivered to Capitol Hill its opening proposal: $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit.
The Associated Press contributed to this report.
