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
  • FDA eases into regulating e-cigarettes

    The federal government’s move to regulate e-cigarettes is a leap into the unknown.
    Most everyone agrees a ban on selling them to kids would be a step forward. But health and public policy experts can’t say for certain whether the electronic devices are a good thing or a bad thing overall, whether they help smokers kick the habit or are a gateway to ordinary paper-and-tobacco cigarettes.

    April 25, 2014

  • Gunman kills three Americans at Kabul hospital

    Three Americans — a pediatrician and a father and son — were killed by an Afghan government security officer at a hospital Thursday, the latest in a series of attacks on foreign civilians that has rattled aid workers, contractors and journalists.
    Another American, a female medical worker, was wounded in the attack at Cure International Hospital of Kabul, run by a U.S.-based Christian charity, and the gunman also was wounded, officials said.

    April 25, 2014

  • Fresh Senate voices speak out on foreign policy

    Fresh voices in the U.S. Senate are speaking loudly on foreign policy, a new generation of Republicans and Democrats who reflect a war-weary nation cautious about America’s next moves.
    Sens. Kelly Ayotte of New Hampshire and Rand Paul of Kentucky stand on either side of the growing divide in the GOP, pitting those who favor more robust U.S. engagement overseas against an isolationist’s deficit-driven concerns about the cost of foreign entanglements.

    April 25, 2014

  • Labor Department cuts levels of allowable coal dust

    The Obama administration said Wednesday it is cutting the amount of coal dust allowed in coal mines in an effort to help reduce black lung disease.
    “Today we advance a very basic principle: you shouldn’t have to sacrifice your life for your livelihood,” Labor Secretary Thomas E. Perez said.

    April 24, 2014

  • Obama offers Japan security, economic assurances

    Facing fresh questions about his commitment to Asia, President Barack Obama will seek to convince Japan’s leaders Thursday that he can deliver on his security and economic pledges, even as the crisis in Ukraine demands U.S. attention and resources elsewhere.

    April 24, 2014

  • Supreme Court: Michigan affirmative action ban OK

    A state’s voters are free to outlaw the use of race as a factor in college admissions, the Supreme Court ruled Tuesday in a blow to affirmative action that also laid bare tensions among the justices about a continuing need for programs that address racial inequality in America.

    April 23, 2014

  • Court critical of law punishing campaign lies

    The Supreme Court appears to be highly skeptical of laws that try to police false statements during political campaigns, raising doubts about the viability of such laws in more than 15 states.

    April 23, 2014

  • U.S.: Russia has ‘days, not weeks’ to follow by an international accord for Ukraine

    Russia has “days, not weeks” to abide by an international accord aimed at stemming the crisis in Ukraine, the top U.S. diplomat in Kiev warned Monday as Vice President Joe Biden launched a high-profile show of support for the pro-Western Ukrainian government. Russia in turn accused authorities in Kiev of flagrantly violating the pact and declared their actions would not stand.

    April 22, 2014

  • U.S. weighing military exercises

    The United States is considering deploying about 150 soldiers for military exercises to begin in Poland and Estonia in the next few weeks, a Western official said Saturday. The exercises would follow Russia’s buildup of forces near its border with Ukraine and its annexation last month of Ukraine’s Crimean Peninsula.

    April 21, 2014

  • Ukraine, Russia trade blame for shootout

    Within hours of an Easter morning shootout at a checkpoint manned by pro-Russia insurgents in eastern Ukraine, Russia’s Foreign Ministry issued a statement blaming militant Ukrainian nationalists and Russian state television stations aired pictures of supposed proof of their involvement in the attack that left at least three people dead.

    April 20, 2014

House Ads
Featured Ads