Republicans threaten ‘plan B’ on fiscal cliff
Republicans in Congress went on the offensive over the fiscal cliff negotiations on Tuesday, threatening to unilaterally introduce a Plan B before the end of the year to prevent tax rises for anyone earning less than $1m a year.
The House Republicans are proposing to introduce a speedy bill that would enshrine these proposals.
The tactic, unveiled by Republican House speaker John Boehner at a press conference in Congress, is aimed at putting pressure on Barack Obama. It would remove one of the main pieces of leverage the White House has over the Republicans: the likelihood they will be blamed if most taxpayers are hit with rises next year.
Plan B may be aimed as much at the Republican party caucus as the White House. If a deal is reached, Boehner will be able to claim Obama caved in.
The White House press secretary, Jay Carney, responding to plan B, said Obama is not willing to accept a deal that does not ask enough of the very wealthiest in taxes.
“The speaker’s ‘plan B’ approach doesn’t meet this test because it can’t pass the Senate and therefore will not protect middle class families, and does little to address our fiscal challenges with zero spending cuts. The president is hopeful that both sides can work out remaining differences and reach a solution so we don’t miss the opportunity in front of us today.”
The Democratic leader in the Senate, Harry Reid, echoing the White House, confirmed that there was no chance of plan B getting through the Democratic-controlled Senate.
The backwards and forwards between the White House and Congress looks like part of the traditional dance before an agreement is reached.
Obama and Boehner, who have spoken several times over the last few days, are closing in on a sweeping deal that would raises taxes on the wealthiest and implement deep cuts to federal spending programmes, including welfare.
The two met for 45 minutes on Monday and spoke by phone in the evening, suggesting a deal is in the offing.
If there is no deal in place by 1 January, all taxpayers face an automatic rise and across-the-board spending cuts will kick in.
Boehner, at the press conference, said: “I believe it important we protect as many American tax payers as we can. Our plan B would protect American taxpayers who make $1m or less and have all of their current rates extended.”
He added: “I continue to have hope that we can reach a broader agreement with the White House that would reduce spending as well as have revenues on the table. I think it would be better for our country but at this point we have a back-up plan to make sure as few American taxpayers would be affected by this increase as possible.”
The House majority leader, Eric Cantor, also at the press conference, hinted that Boehner and Obama are close to a deal, in spite of talk of a Plan B. “The president is not yet there. He has not come to where he needs to be in order for to push through a bill that really does begin to address the problem. As the speaker said, that is why we are now discussing an alternative plan if the president and White House can’t come our way.”
Both Obama and Boehner have moved a long way from their original starting points. Obama made an important concession on Monday on tax. Having campaigned this year on raising tax for everyone earning $250,000 or more, he agreed in negotiations with Boehner on Monday to raise the threshold to $400,000. The White House signalled too that this was not Obama’s final offer.
The sticking points appear bridgeable. Obama wants an over-arching deal that will include the debt ceiling, which is having to be raised annually and has turned into an annual White House versus Republican showdown. Obama wants the debt ceiling removed as an issue for the next two years.
Boehner is also seeking to raise the age at which Medicare begins raised from 65 to 67, which the White House has so far resisted.