House Speaker John Boehner says he is readying a backup bill aimed at averting the "fiscal cliff."
WASHINGTON -- House Speaker John A. Boehner’s "Plan B" on the budget talks, bringing to a vote his proposal to extend expiring tax breaks for all but those Americans who earn more than $1 million a year, ran almost immediately into stiff resistance Tuesday.
Conservative Republicans pushed back against it, the White House swiftly rejected the approach and House Minority Leader Nancy Pelosi (D-San Francisco) called it "dead on arrival."
Boehner's decision, shared behind closed doors during a morning meeting of rank-and-file GOP lawmakers, was an abrupt shift after the Ohio Republican and President Obama had substantially narrowed their differences in talks that both sides described as optimistic. The proposed vote could come as soon as Thursday.
By calling up the legislation for a vote, the speaker is trying to build momentum toward a resolution as talks over a broader deficit deal continue. He wants to avoid having his party be seen as causing a tax hike on most Americans in the new year, which would happen if no agreement is reached.
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"We have to stop whatever tax-rate increases we can," the speaker told his troops, according to prepared remarks supplied by a source familiar with the talk but not authorized to disclose it. "In the absence of an alternative, as of this morning, a modified Plan B is the plan. At the same time we're moving on Plan B, we're leaving the door wide open for something better."
The speaker made it clear that he is not cutting off talks with Obama as they continue to pursue a deficit-reduction package to avert the "fiscal cliff" of automatic tax hikes and spending cuts in the new year. He and the president spoke by phone late Monday after a morning meeting at the White House.
White House Press Secretary Jay Carney dismissed the speaker’s Plan B in a statement, saying it "can't pass the Senate and therefore will not protect middle-class families." He added that Obama "is not willing to accept a deal that doesn't ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors."
Obama campaigned on extending tax breaks for household income of less than $250,000 a year, although he has sought compromise in talks this week with Boehner, indicating a willingness to raise that threshold to $400,000.
Boehner seeks to launch a legislative ping-pong game between the House and Senate over the Plan B bill. If he is able to pass the measure in the House -- which remains uncertain -- Republicans expect that the Senate, controlled by Democrats, would likely amend it to reflect Obama’s priorities on taxes and stimulus spending on long-term unemployment insurance, and send it back to the lower chamber.
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Senate Majority Leader Harry Reid (D-Nev.) said the Boehner bill could not pass either chamber.
As Boehner outlined his strategy Tuesday, conservative Republicans bristled at being asked to raise the highest tax rates, now at 35%, to 39.6% for those earning more than $1 million a year. Tax rates on capital gains and dividends would also rise on those wealthy households.
"I hate it. I hate it," said Rep. Jason Chaffetz (R-Utah), an outspoken leader of House conservatives. But he did not say he would oppose it. "I'm trying to be reasonable. I understand no one person is going to get everything they want."
Conservatives want more federal spending cuts in exchange for any new tax revenue -- but not the massive automatic spending cuts in place for early next year. Plan B would keep those cuts in place.
Freshman Rep. Sean Duffy (R-Wis.) said reaction was mixed as Boehner spoke. "There will be some of us that will say no; some of us will say yes," he said. "This is a reality check, people are trying to grapple with the situation in which we sit right now."
Democrats, though, were more certain of the outcome, especially because the Boehner proposal would reduce the cost-of-living adjustment for those who receive government benefits, likely including Social Security, which would be a major concession for the Democratic Party. Obama has offered making that cut, but only in exchange for higher tax rates on households making at least $400,000 a year.
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"I don’t know what the purpose of this Plan B is," Pelosi said as she emerged from a closed-door meeting of House Democrats. "To find out if Democrats will support that? They won't."
"Speaker Boehner seems to be walking away," added Maryland Rep. Chris Van Hollen, the House Democrats' point person for discussions of the fiscal cliff. "I know he says he wants to engage in conversation, but now he's doing this unilateral course."
Boehner faces an enormous test in trying to get his Plan B out of the House with his conservative majority. He plans to offer the rank-and-file a chance to make changes to the bill.
"He's got a difficult hand to play: On the one hand, he’s got difficult negotiations, and on the other hand, he’s got a contentious conference to deal with," said freshman Rep. Steve Womack (R-Ark.) "He understands what reality is. He understands he’s got a difficult sell ahead of him."
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