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.
It’s beginning to look like it’s time for Plan B on the “fiscal cliff.”
- Headline News
Colorado deaths stoke worries about pot edibles
A college student eats more than the recommended dose of a marijuana-laced cookie and jumps to his death from a hotel balcony. A husband with no history of violence is accused of shooting his wife in the head, possibly after eating pot-infused candy.
Everest avalanche kills at least 12
An avalanche swept down a climbing route on Mount Everest early Friday, killing at least 12 Nepalese guides and leaving four missing in the deadliest disaster on the world’s highest peak. Several more were injured.
Diplomacy doesn’t move insurgents in Ukraine
Pro-Russian insurgents defiantly refused Friday to surrender their weapons or give up government buildings in eastern Ukraine, despite a diplomatic accord reached in Geneva and overtures from the government in Kiev.
Clinton to Obama: Many parallels
Thousands of pages of documents from President Bill Clinton’s White House affirm a longtime adage: The more things change, the more they stay the same.
As Clinton prepared for an August 1994 news conference in which he hoped to build public support for his struggling — and ultimately unsuccessful — health care overhaul, he told his advisers: “A lot of them want to know they can keep their own plan if they like it.”
Obama voices skepticism on Russia in Ukraine
President Barack Obama conveyed skepticism Thursday about Russian promises to de-escalate a volatile situation in Ukraine, and said the United State and its allies are ready to impose fresh sanctions if Moscow doesn’t make good on its commitments.
President defending health-care law good for some Democrats
President Barack Obama’s full-throated defense of his health-care overhaul seems perfectly timed for Democrats who want their party to embrace the law more enthusiastically.
At a White House news conference Thursday, Obama noted that health insurance enrollments under the new law are higher than expected, and costs are lower.
Deal reached on calming Ukraine tensions — for now
In a surprise accord, Ukraine and Russia agreed Thursday on tentative steps to halt violence and calm tensions along their shared border after more than a month of Cold War-style military posturing triggered by Moscow’s annexation of Crimea.
Boston Marathon organizers confident of safe race
The arrest of a man with a rice cooker in his backpack near the Boston Marathon finish line led police to step up patrols Wednesday, while organizers sought to assure the city and runners of a safe race next week.
The actions of the man, whose mother said he had a mental disorder, rattled nerves as Boston prepared for the annual race, but authorities said they did not consider it a security breach.
VIDEO: Toddler climbs into vending machine
A child is safe after climbing into and getting stuck inside a claw crane machine at a Lincoln, Neb., bowling alley Monday.
Solemn tributes mark Boston Marathon bombing anniversary
Survivors, first responders and relatives of those killed in the Boston Marathon bombing marked the anniversary Tuesday with tributes that combined sorrow over the loss of innocent victims with pride over the city’s resilience in the face of a terror attack.
- More Headline News Headlines
- Colorado deaths stoke worries about pot edibles