Boehner moving to Plan B on fiscal cliff
House Republicans, discouraged by the pace of negotiations with the White House, will move their own bill that would hike tax rates on income above $1 million, according to several sources familiar with the plan.
Speaker John Boehner (R-Ohio) told President Barack Obama of his plan last night on a phone call, according to sources.
Boehner will make the argument to House Republicans that tax rates will go up on everyone come Jan. 1. "The question for us is real simple: How do we stop as many of those rate hikes as possible?" Boehner plans to tell House Republicans.
"For weeks, Senate Republicans -- and a growing number of you -- have been pushing for us to pivot to a 'Plan B,'" he will say. "I think there's a better way. But the White House just can't seem to bring itself to agree to a "balanced" approach, and time is running short. Taxes are going up on everyone on Jan. 1. They're baked into current law. And we have to stop whatever tax rate increases we can. In the absence of an alternative, as of this morning, a 'modified Plan B' is the plan."
House Republicans are expected to move on the bill this week, sources said. It addresses only taxes, not deep spending cuts known as the sequester that slated to take effect in the new year.
Boehner isn't pulling out of negotiations with the White House to strike a sweeping $2 trillion agreement, but leadership sources say they hope this move prods the administration to move toward them.
As of Monday evening, both sides seemed close to an agreement. Boehner has moved off his insistence that tax rates not rise on the wealthy, and has offered the president $1 trillion in fresh revenue -- unthinkable concessions a year ago.
But Obama and Boehner are still a considerable distance apart on taxes. Obama wants to increase tax rates on income over $400,000. Boehner wants the threshold to be set at $1 million; the House GOP proposal would keep the lower Bush-era rates in place for income brackets below that. In essence, Boehner is seeking $1 trillion in revenue and $1 trillion in cuts -- but he doesn't think the president is willing to get there.
"He talked about a 'balanced' approach on the campaign trail," Boehner intends to say. "What the White House offered yesterday -- $1.3 trillion in revenue for only $850 billion in spending cuts -- cannot be considered balanced. We're going to keep the door open in hopes the president can find a way to support a balanced approach."