The sword-fighting between Democrats and Republicans could get nasty in the next few days as the battle heats up over how to avoid the fiscal cliff.
Republican House Speaker John Boehner got the action started Tuesday when he unveiled his “Plan B” proposal that keeps tax cuts alive for anyone making less than $1 million a year, while also allowing the mandatory spending cuts on Defense and domestic programs to take place.
President Obama added fuel to the fire at a news conference Wednesday, suggesting that the Republicans have turned this into a contest where beating him is a higher priority than solving the problem.
“It is very hard for (Republicans) to say yes to me,” Obama said. “But you know, at some point, they’ve got to take me out of it and think about their voters and think about what’s best for the country.
“If they’re not worried about who’s winning and who’s losing, that they score a point on the president, that they extract that last little concession, that they force him to do something he really doesn’t want to do just for the heck of it, and they focus on actually what’s good for the country, I think we can get this done.”
Boehner Wants a Vote
Boehner also is in a hurry. He hopes to put the Plan B proposal to a vote before the House of Representatives on Thursday. Plan B raises taxes only on those earning more than $1 million and amends the Alternative Minimum Tax (AMT) so that it doesn’t pull in so many middle-class wage earners. The AMT, if not modified, would force an estimated 28 million Americans to pay an average of $3,700 more in taxes this year.
“The House will pass legislation to make permanent tax relief for almost every American,” Boehner said. “Then the president will have a decision to make: He can call on Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history.”
What “Plan B” doesn’t protect against are mandatory spending cuts on Defense and domestic programs. The Boehner proposal would allow approximately $110 billion to be chopped out of the 2013 budget, split evenly between Defense and domestic programs.
That part definitely would appeal to Boehner’s fellow Republicans, who are otherwise cool to Plan B’s call for raising tax rates on millionaires. If Boehner can convince the Republican-controlled House to pass the bill, the onus for avoiding the fiscal cliff then passes to the Democrat-controlled Senate.
“If Democrats disapprove of this bill, then there is a simple solution: Amend it in the Senate and send it back to the House,” Boehner spokesman Brendan Buck said in a statement.
Reid Says ‘No’
Senate Majority Leader Harry Reid said very emphatically that if the bill gets out of the House, he will not let it get through the Senate. Reid was incensed that Boehner had abandoned the negotiations he had earlier this week with Obama that had resulted in compromise on both sides.
Obama offered tax cuts to everyone making less than $400,000; eliminated his insistence that the payroll tax be extended; and agreed to a new formula to adjust cost of living increases for Social Security. Boehner reportedly said he’d agree to tax cuts for everyone making $500,000 or less and would allow the debt ceiling to increase without a fight in 2013.
Neither Reid nor Obama was happy that those agreements were set aside when Boehner came out with Plan B.
“Now is the time to show leadership, not kick the can down the road,” Reid said. “Speaker Boehner should focus his energy on forging a large-scale deficit reduction agreement. It would be a shame if Republicans abandoned productive negotiations due to pressure from the tea party, as they have time and again.”
The president told reporters Wednesday: “I’ve said I’m willing to make some cuts. What separates us is probably a few hundred billion dollars. The idea that we would put our economy at risk because you can’t bridge that gap doesn’t make a lot of sense.”
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at email@example.com.
- Runningen, R. and Hunter, K. (2012, December 19). Obama Wants Deal by Christmas to Avoid Fiscal Changes. Bloomberg. Retrieved from http://www.bloomberg.com/news/2012-12-19/boehner-plan-b-aims-to-show-republican-tax-aversion.html
- Sweet, L. (2012, December 19). Obama gun violence, fiscal cliff press conference transcript. Chicago Sun-Times. Retrieved from http://blogs.suntimes.com/sweet/2012/12/obama_gun_violence_fiscal_clif.html
- Cohen, T. (2012, December 19). Obama to GOP: It’s about the country, not me. CNN. Retrieved from http://www.cnn.com/2012/12/19/politics/fiscal-cliff/