Concerned that the “fiscal cliff” negotiations with President Obama will not bear fruit, House Speaker John A. Boehner said Tuesday that House Republicans are prepared with a “Plan B” option that calls for higher taxes on millionaires and locks in current tax rates for everyone else.
Mr. Boehner, Ohio Republican, said this alternative path would allow Congress to “protect as many American taxpayers as we can” and said Mr. Obama is pushing too much for higher taxes and too little for spending cuts.
“Our ‘Plan B’ would protect American taxpayers making $1 million or less and would have all of their current rates extended,” Mr. Boehner told reporters at a press conference. “I continue to have hope that we can reach a broader agreement with the White House that would reduce spending as well as have revenues on the table.”
The president and the speaker met for 45 minutes at the White House on Monday — their third discussion in less than a week — to try to find a middle ground on how to handle the Jan. 1 expiration of the George W. Bush-era tax cuts and the $110 billion in cuts to defense and domestic spending that are set to take hold Jan. 2.
In the meeting, Mr. Obama backed off on his demand to raise taxes on families making $250,000 a year or more — instead calling for taxes to go up on those households making $400,000 or more. He also agreed to reduce future cost-of-living increases for Social Security beneficiaries.
Before addressing reporters on Tuesday, Mr. Boehner told his caucus on that the president’s plan is not balanced when it comes to taxes and spending.
“What the White House offered yesterday — $1.3 trillion in revenue for only $850 billion in spending cuts — cannot be considered balanced,” Mr. Boehner said.
The speaker insisted during his meeting with his caucus and later with reporters that the proposal he delivered to the White House late last week is the “definition of balance.”
The Boehner plan called for $1 trillion in new revenue — through tax increases on millionaires and eliminating loopholes and deductions in the tax code — and $1 trillion in spending cuts, as well as for an increase in the nation’s borrowing limit, which now sits at $16.4 trillion.
“Instead of letting tax rates rise on Americans making $250,000 or more, the rates would rise only on those making a million and up,” Mr. Boehner told his caucus Tuesday. “Instead of getting zero spending cuts, we’d get a trillion in spending cuts, mostly from entitlement programs. Most importantly, we’d lock in a process for tax reform and entitlement reform in 2013 — the two big goals we’ve talked about for years.”
Despite saying it was time to prepare a backup plan, Mr. Boehner said he will continue to work with Mr. Obama on a broader deficit-reduction deal.
“We’re going to keep the door open in hopes the president can find a way to support a balanced approach,” he said.