Boehner’s ‘Plan B’ for Fiscal Crisis Gets Panned By Congress

The momentum Republican House Speaker John Boehner and President Obama built Monday toward a resolution of the fiscal cliff crisis lasted less than 24 hours.

It ended when Boehner chose to present a backup plan, something he dubbed “Plan B,” to members of Congress on Tuesday, rather than going over details of the compromises he and Obama discussed Monday.

The primary feature of Boehner’s “Plan B” proposal is that it would provide tax cuts for everyone making less than $1 million. Boehner wants to put that to an immediate vote in Congress, while he and Obama continue to work out details of a broader proposal for spending cuts and tax hikes.

“Our hope continues to be to reach an agreement with the president on a balanced approach that averts the fiscal cliff,” Boehner said at a news conference. “What we offered meets the definition of balance, but the president is not there yet.”

Democrats Say ‘No’

Not many are there for “Plan B,” especially Democrats.

“He (Obama) is not willing to accept a deal that doesn’t ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors,” White House press secretary Jay Carney said in a statement.

“Republicans’ so-called ‘Plan B’ is nothing more than a cynical ploy that is harmful to the middle class and the economy,” House Minority Leader Nancy Pelosi said in a statement.

Democratic Whip Steny Hoyer of Maryland issued a statement that read: “We cannot get the revenue we need from higher tax rates on those making over $1 million, as Speaker Boehner’s ‘plan B’ suggests. The math does not add up. With just days left, I am encouraging Democrats to oppose the Speaker’s move and send a message that we, Democrats and Republicans together, must get back to the real work of negotiating a big and balanced solution.”

Republicans Object, Too

Across the aisle, some Republicans didn’t like the fact that Boehner’s plan called for tax increases. Jim Jordan, a Republican from Ohio, said a lot of members were struggling with the proposal.

Wisconsin representative Paul Ryan, chairman of the Budget Committee, would not comment on it. Neither would other strongly anti-tax members like Iowa’s Steve King and Tim Huelskamp of Kansas.

Jordan told reporters that “once you cross that line and say that it’s OK for some people’s taxes to go up, I think it’s a mistake for the Republican Party.”

Rep. Raul Labrador of Idaho said he didn’t think enough Republicans supported the plan for it to pass.

“I think it’s a terrible idea, for a lot of reasons,” Labrador told reporters.

No Compromise in Sight

The “Plan B” announcement took all the steam out of reports early Tuesday that Obama and Boehner were getting close to a compromise plan for dealing with the fiscal cliff. The two met at the White House on Monday and exchanged a phone call Monday night about a plan that would include a $400 billion concession from Obama on raising tax revenue.

Obama originally asked for $1.6 trillion in tax hikes over the next 10 years, but has lowered that to $1.2 trillion. The president also reportedly agreed to raise the level for those receiving tax cuts to $400,000 from his previous proposal of $250,000.

Obama also agreed to a new formula for measuring inflation that could produce savings of $225 billion over the next 10 years in programs like Social Security. The president dropped his demand for extending the payroll tax holiday, a benefit nearly every taxpayer enjoyed the last two years.

Boehner countered with an offer to raise $1 trillion in revenue with tax hikes and delay the battle over the spending limit for another year.

Predictably, there were some signs of optimism that the negotiations are close enough for Congress to vote on a deal before mandatory spending cuts and tax hikes go into effect Jan. 1.

“Any movement away from the unrealistic offers the president has made previously is a step in the right direction,” Boehner spokesman Brendan Buck said in a statement to reporters. “We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem.”

Back to Work after Christmas?

On the Democratic side, Senate Majority Leader Harry Reid, speaking on the Senate floor Monday, told his colleagues: “It appears that we’re going to be coming back the day after Christmas to complete work on the ‘fiscal cliff.’ ”

That would give both sides a week to work through the many secondary issues where there is still disagreement, sometimes considerable.

Part of Obama’s revised plan includes savings of $290 billion on the national debt interest accumulation. Republicans don’t regard “savings” as a real spending cut. The president also wants a two-year extension of the debt ceiling limit that he concedes could be subject to periodic review by Congress.

That is not popular at all with Republicans.

“President Obama has asked for the authority to increase the debt limit whenever he wants, however high he wants – with no spending cuts. That is never going to happen,” Buck said in a statement posted on Boehner’s website. “Congress controls the purse strings, and it will never hand control of the debt limit over to the President.”

Republicans also will have something to say about Obama’s insistence on improving infrastructure and extending expiring unemployment benefits.

Democrats are worried about spending cuts for Medicare and Medicaid. They also have problems with revising the cost-of-living increases for those on Social Security.