US Republicans make 'fiscal cliff' counter-offer

WASHINGTON (AFP) - Republicans on Monday laid out a proposal for closing the huge United States (US) deficit that raises half the income proposed by President Barack Obama and opposes a higher tax rate increase for the rich.

Their US$2.2 trillion (S$2.7 trillion) deficit reduction proposal agreed to the permanent extension of tax cuts, a move that would mitigate much of the impact of the looming fiscal cliff.

But they did not immediately address Mr Obama's call to modify or delay the drastic "sequester" spending cuts slated to begin on Jan 1 that could sharply slow growth.

Instead they proposed slashing US$1.2 trillion from federal spending over 10 years, including US$600 billion from Medicare, which covers health insurance for the elderly.