The Times West Virginian

Headline News

December 15, 2012

It may be time for Plan B on fiscal cliff

WASHINGTON — It’s beginning to look like it’s time for Plan B on the “fiscal cliff.”

With talks between President Barack Obama and House Speaker John Boehner apparently stalled, the leading emerging scenario is some variation on the following: Republicans would tactically retreat and agree to raise rates on wealthier earners while leaving a host of complicated issues for another negotiation next year.

The idea is that House GOP leaders would ultimately throw up their hands, pass a Senate measure extending tax rates on household income exceeding $250,000, and then duke it out next year over vexing issues like increasing the debt ceiling and switching off sweeping spending cuts that are punishment for prior failures to address the country’s deficit crisis.

It’s easier said than done.

For starters, that scenario has a lot more currency with Senate Republicans, who wouldn’t have to vote for the idea after it comes back to the Democratic-controlled Senate, than with leaders of the Republican-controlled House, who would have to orchestrate it and who still insist they’re not abandoning talks with the White House and that they’re standing firm against raising tax rates.

“I think it’s time to end the debate on rates,” said Sen. Richard Burr, R-N.C. “It’s exactly what both parties are for. We’re for extending the middle-class rates. We can debate the upper-end rates and what they are when we get into tax reform.”

“I think we end up with something like this Plan B,” said GOP lobbyist Hazen Marshall, a longtime former Senate aide. “They probably figure out something on the rates by the end of the year but on everything else negotiations just continue.”

House Republicans have yet to embrace the idea.

“There are literally dozens and dozens and dozens of members out there who have various ideas for how they could endgame this, or Plan B type scenarios, but none of that is under active discussion or consideration by the leadership,” said Boehner spokesman Kevin Smith.

White House spokesman Jay Carney said Obama was still pursuing a broader deal with Boehner that didn’t simply address the expiring tax rates, but also more revenue and spending reductions with a goal of reducing deficits. But he said that was out of reach if House Republicans refused to let the top rates rise for wealthy earners.

“It is still their position, as they tell you when you ask them, that they want extension of the high-end Bush tax cuts. That is not going to happen,” Carney said. “The president will not sign such legislation.”

Don’t underestimate the explosion that giving in to Obama could create in GOP ranks, however. Republicans have been adamantly opposed to raising marginal tax rates, even as they now say they’re willing to raise $800 billion or more in new tax revenues by closing loopholes and deductions. For months, the GOP mantra has been that raising tax rates will cost jobs, especially among businesses that would be affected. Some 94 percent of America’s businesses are structured so that profits go directly to partners or shareholders who report the income on their individual tax returns.

Moving to Plan B would also mean that one side in the Obama-Boehner talks would have to throw up their hands and leave the bargaining table.

“Listen, we have never changed our posture. We remain willing, desirous of talking with the White House, of being specific with the president about how we address the spending problem,” said House Majority Leader Eric Cantor, R-Va.

The counter view is that even tea party Republicans like Sen. Rand Paul, R-Ky., are resigned to the fact that Obama simply won’t yield on rates and that a tactical retreat would allow Republicans to rejoin the battle when it comes time to pass must-do legislation to increase the government’s borrowing cap early next year.

That approach requires House Republicans to retreat in a fashion similar to the way majority Democrats relied on Republican votes when finessing must-pass bills to fund military operations in Iraq and Afghanistan under President George W. Bush. That would mean structuring floor debate to allow the Obama-backed tax hike to pass mostly with Democratic votes.

But the need for Democratic votes means Republicans might have to resist the temptation to add GOP sweeteners to the measure like a more generous extension of the estate tax than Obama likes or to keep tax rates on investment income from rising from 15 percent to 20 percent as the Senate bill would do. Democrats would probably take their lead from Obama if Republicans sought to power such proposals past them — and if they resisted, Plan B could implode.

Democrats say they’d likely go along if the House simply passed the tax bill the Senate passed in July and left other fiscal cliff items on the table.

 

1
Text Only
Headline News
  • W.Va. man arrested after child found in hot car

    A Wheeling man faces charges that he left his 18-month-old daughter in a hot car while he was asleep on a couch.

    July 29, 2014

  • Board to meet on dangerous animals list

    CHARLESTON (AP) — A board tasked with compiling a list of animals that are illegal to keep as pets in West Virginia will consider one that’s shorter than a list suggested earlier.

    July 28, 2014

  • Clinton impeachment shadows GOP lawsuit against Obama

    The last time Republicans unleashed impeachment proceedings against a Democratic president, they lost five House seats in an election they seemed primed to win handily.

    July 28, 2014

  • Study: Fist bumps less germy than handshakes

    When it comes to preventing the spread of germs, maybe the president is on to something with his fondness for fist bumps.

    July 28, 2014

  • Obama Exporting Pollu_time.jpg ‘Not in my backyard’: U.S. sending dirty coal abroad

    As  the Obama administration weans the U.S. off dirty fuels blamed for global warming, energy companies have been sending more of America’s unwanted energy leftovers to other parts of the world where they could create even more pollution.
    This fossil fuel trade threatens to undermine President Barack Obama’s strategy for reducing the gases blamed for climate change and reveals a little-discussed side effect of countries acting alone on a global problem. The contribution of this exported pollution to global warming is not something the administration wants to measure, or even talk about.

    July 28, 2014 1 Photo

  • U.S.: Russia fired rockets into Ukraine

    Stepping up pressure on Moscow, the U.S. on Sunday released satellite images it says show that rockets have been fired from Russia into neighboring eastern Ukraine and that heavy artillery for separatists has crossed the border.
    The images, which came from the U.S. Director of National Intelligence and could not be independently verified by The Associated Press, show blast marks where rockets were launched and craters where they landed. Officials said the images show heavy weapons fired between July 21 and July 26 — after the July 17 downing of Malaysia Airlines Flight 17.

    July 28, 2014

  • Plan to simplify health renewals may backfire

    If you have health insurance on your job, you probably don’t give much thought to each year’s renewal. But make the same assumption in one of the new health law plans, and it could lead to costly surprises.
    Insurance exchange customers who opt for convenience by automatically renewing their coverage for 2015 are likely to receive dated and inaccurate financial aid amounts from the government, say industry officials, advocates and other experts.
    If those amounts are too low, consumers could get sticker shock over their new premiums. Too high, and they’ll owe the tax man later.

    July 28, 2014

  • W.Va. Judge: WVU, IMG College deal is OK

    A judge has denied a motion by West Virginia Radio Corp. to toss the media rights contract between West Virginia University and IMG College.
    Media outlets report Monongalia County business court circuit judge Thomas Evans set aside a motion for summary judgment against WVU and others.
    West Virginia Radio was seeking to void any contract entered by WVU and IMG. West Virginia Radio unsuccessfully bid on the contract, then filed a motion for summary judgment in February, claiming school officials violated state procurement laws.
    Evans ruled the code cited by the plaintiffs didn’t apply to the $86.5 million, 12-year agreement reached last year.

    July 28, 2014

  • Powerful storms rip through eastern U.S.

    Powerful storms raking across several states in the eastern U.S. on Sunday have destroyed at least 10 homes in Tennessee, and there were no immediate reports of any deaths or injuries, authorities said.

    July 27, 2014

  • Lawmakers say Obama too aloof with Congress

    President Barack Obama’s request for billions of dollars to deal with migrant children streaming across the border set off Democrats and Republicans. Lawmakers in both parties complained that the White House — six years in — still doesn’t get it when it comes to working with Congress.

    July 27, 2014

House Ads
Featured Ads