Although President Obama and House Speaker John A. Boehner are moving closer to a fiscal-cliff deal, Boehner has come up with a backup plan for avoiding the cliff, The Post’s Lori Montgomery, Paul Kane and Ed O’Keefe report :
House Speaker John A. Boehner said Tuesday that he will introduce legislation — opposed by Democrats— to raise taxes only on households earning $1 million or more, as a backup plan for avoiding the “fiscal cliff” if his attempts to forge a broader spending agreement with the White House fail.
Negotiations between Boehner and President Obama have made significant progress in recent days, with Boehner agreeing to the idea of raising tax rates on the wealthiest Americans, and Obama saying he could accept tax increases for households earning $400,000 or more per year. That threshold is a concession from the president’s campaign pledge to raise rates on those earning at least $250,000, but it remains unacceptable to many Republicans.
Boehner (R-Ohio) said he plans to continue negotiating with Obama in hopes of striking a broad agreement on both tax increases and spending cuts. But at the same time, with precious few days remaining until an automatic series of tax increases and spending cuts takes effect, he offered the million-dollar legislation as his “Plan B.”
“We’re leaving the door open wide for something better,” Boehner told fellow Republicans, according to prepared remarks provided by aides. “And I have been clear about that with the president. Plan B is Plan B for a reason. It’s a less-than-ideal outcome. I’ve always believed we can do better.”
Potential concessions offered from both Obama and Boehner have made activists on the left and right anxious, The Post’s Rosalind Helderman reports :
There is no deal yet to avert the year-end “fiscal cliff.”
But that hasn’t stopped the pressure from beginning to build to reject the not-yet-a-deal, as potential concessions offered by House Speaker John A. Boehner (R-Ohio) and President Obama in private weekend talks have begun to emerge, setting off anxiety in activist groups on the left and right.
The anger being brought to bear against a nascent budget framework helps illustrate how hard it has been to get a bipartisan deal on deficit reduction in recent years.
The coming days will be critical, determining whether GOP rank-and-file balk at raising taxes — Boehner, sources say, has indicated a willingness to allow tax rates to rise at least for those making more than $1 million dollars a year.
Democratic leaders will also be feeling out liberals to see whether they will vote for entitlement cuts as part of a deficit reduction deal.
Wonkblog’s Suzy Khimm looks at a few sticking points in the fiscal cliff deal:
President Obama’s latest fiscal cliff offer has brought the outlines of a final deal into focus. But there are still some major sticking points and outstanding questions that have to be resolved before a final deal will be able to pass Congress.
1) Will low-income seniors be protected from Social Security cuts? If so, how? Liberals are not happy with this concession to Republicans, calling it a “backdoor benefit cut.” The administration has tried to allay these concerns by promising to shield the impoverished elderly from harm. The White House hasn’t gone into details, but the top-line numbers indicate that Obama is backing a modified plan with less sweeping benefit cuts: Obama’s latest offers promises $130 billion in savings from chained CPI, which is significantly less than the $220 billion in savings that the Congressional Budget Office says would be achieved through a full-out transition to the new inflation index.
That suggests that Obama would protect some retirees, giving up some savings in the process. But Democrats will want to know exactly how low-income seniors are protected — CBPP’s Jared Bernstein, for one, wants to make sure any deal exempts benefit changes to Supplementary Security Income, which goes to the elderly, blind and disabled. And it won’t necessarily be easy, policywise, to protect the elderly against cuts, as Mike Konczal argues. At the same time, Republicans could push Obama to squeeze even more savings out of Social Security than he’s currently offering: House Speaker John Boehner’s original proposal contained $200 billion in chained CPI savings.
2) Will House Republicans go along with tax hikes? On the one hand, the end game on taxes seems clear: Boehner has moved to a $1 million threshold for the Bush tax cuts, and Obama has moved to $400,000, indicating that a deal is somewhere in between. That’s assuming, however, that Boehner will be able to keep his own caucus in line: More Republicans have called for the party to concede on marginal tax rates, but they’re still a minority in the party. Today, Boehner vowed to hold a House vote this week on a tax extension on a $1 million threshold. That could be a hardball negotiating tactic with the White House. But it could also be a litmus test of sorts for his own party’s willingness to accept any tax hike ...