GOP’s new fiscal cliff counter offer thin on details

>> to our panel now. msnbc contributor ari melber is with me in the studio, and democratic strategist julian epstein joins us from washington. speaker boehner today hold reporters the president is in la la land . then he presents a counteroffer based on the mythical dynamic scoring system that saves money through projected growth. who is actually living in la la land ?

>> yeah, this is really extraordinary. and the republicans are not living in the real world . consider what we're thinking about, what we're talking about right now. obama , who won the election with an overwhelming electoral college mandate has put forward exactly what he campaigned on, which is sensible tax reform allowing the top 2% of the tax -- of rates to increase on the top 2% of tax earners and spending cuts. we've had a trillion in spending cuts already, $800 billion additional in the drawdown from the war efforts in afghanistan and iraq, and then a number of spending proposals that obama put on the table in august of '11. consider that against what republicans are doing, and this shows that republicans are really chicken hawks when it comes to reducing the debt. they have a plan on tax reduction which most economists think would do far more harm than the obama plan would. secondly, they fail to specify what kind of cuts they want. remember, this is the party that's campaigned for two election cycles now on cutting government spinding, but when you ask them to identify exactly what you want to cut, you get mishmash from them. you get $100 billion in medicare savings by increasing the retirement age from 65 to 67. you get some unspecified savings from reducing social security . the only specifics if you add them up are about $300 billion or $400 billion in specific cuts, the rest are inspecific. this is the party whose fundamental premise is to cut government spending . you ask them to identify how they want to do it, and they start speaking in gibberish. it shows you this is a phony, phony movement on the part of conservatives to cut government spending .

>> absolutely. ari, the president took a question on twitter this afternoon. quote, what is your opposition to taking away deductions for the 2% rather than upping the rate? seems like a reasonable compromise. his answer, not enough revenue unless you end charitable deductions. he's right, isn't he? the math doesn't add up. it didn't add up with mitt romney . it doesn't add up today.

>> it doesn't add up, and those targeted revenue measures serve certain goals that we actually care about more than helping billionaires. those goals include what you just said, incentivizing charitable giving , and also home ownership , which is a middle to upper class benefit, but it's one that we've always encouraged with the mortgage interest rate deduction because we want people moving into the middle class . that matters more, that is better than just worrying about billionaires. one other point i want to hit since we're on the martin bashir show, i know this is a place for real talk so if we can have some real talk for a second. there is no fiscal cliff. there's no special deadline. these are long-term debates. you were asking mr. russert about the past negotiations because these are debates we've had in the past that we will continue to have in the future. some people would rather solve them in the bottom of the ninth. that would be better. but if we go into the tenth or 11th inning it's not a cliff because eventually we will work this out. why? congress has a time machine . if they want to make cuts retroactive, if they want to help you in the last fiscal year, if they want to back date things, they can do that, we can't, you can't do that with your own taxes, but the government can. so i agree we are seeing the republicans put the gun to the collective head of the congress and the economy hoping to get the same hostage antics they got before, but let's be clear, if this deal gets done in january or february, as long as it gets done the right way, it will be fine. it's not a cliff.

>> do you agree with that, julian ? because my understanding is that this would in effect usher in a period of austerity and trouble the markets.

>> it's partly right and partly i disagree with it. it is true on january 1st , tax rates go up for everybody, and the economic consequence of tax rates going up for everybody, even if you try to retroactively fix that middle of the year, the economic effects are very negative. so there's no interest i think on any party on going over the cliff. secondly, there are some cuts that go in automatically at the beginning of january that would be difficult to unravel, but you could, as ari said do, that theoretically. remember, the fiscal cliff is an idea that was put forward by republicans --

>> of course.

>> as an austerity plan. i agree with ari in the sense that it's a total artifice. there's no reason why you necessarily need to have that, but railroad ama -- ari makes the good point that home ownership and charitable giving are two things in the tax code we want to keep in place. all economists are nearly unanimous if you raise rates on the top 2% you will shave off 0.1% of gdp. you will have no effect on economic growth if you increase tacks on the extraordinarily wealthy here. but, you know, again, this is a party that has campaigned for three years now on cutting the deficit, on cutting government spending . it's unbelievable to me that when you come down to the 11th hour in the negotiations right now, this party cannot identify any significant cuts of any significant scale in either entitlement spending or discretion yaer spending. it shows you this is a party that can talk the talk but can't walk the walk.

>> to julian 's point, last week boehner tossed out the idea of maybe going back to paul ryan 's budget. today he tosses out erskine bowles recommendation, aside from the fact he's a plagiarist, doesn't that indicate it's not a constructive and detailed plan.

>> the onus is on the republicans to come up with a response. they failed to do that. what they came to a was erskine bowles plan which is funny for a lot of reasons. we don't have the time to get into it.

>> we don't.

>> it's not their plan. it doesn't deal with the specifics. we will have a moment of clarity, and if during that moment of claire clity the republicans don't back down, the public will see this same mechanism again they want to put their political maneuvering ahead of a common sense middle class approach for the whole country. i think this time will be worse for them than last time and i think the markets can see what's going on.

>> okay.

>> two final points --

>> i'm sorry, we just don't have enough time but thank