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Boehner Invokes ‘Plan B’, Dismissing Obama’s Fiscal Offer

December 18, 2012 by Leave a Comment

The move came less than 24 hours after President Obama offered a more comprehensive deal that would raise tax rates on income over $400,000, raise $1.2 trillion in new revenue and cut $930 billion in spending over 10 years. Mr. Boehner declared that unbalanced and insufficient.

“What we’ve offered meets the definition of a balanced approach, but the president is not there yet,” Mr. Boehner said Tuesday.

The speaker made it clear he would continue negotiating with the president, and some House Republicans emerged from a closed-door meeting with Mr. Boehner confident that a deal was now in reach.

“We’re getting there,” said Representative James B. Renacci, Republican of Ohio.

But to raise the pressure, House leaders will proceed with what they are calling “Plan B,” which could come to a vote as early as Thursday. Under that plan, the House would take up tax legislation and consider two amendments. The first would mirror a bill passed by the Senate that would extend expiring Bush-era tax cuts for income below $250,000. That would be expected to fail, showing the president that his initial offer could not pass. A second amendment would raise that threshold to income below $1 million. The House may also vote on some middle ground, like the president’s $400,000 threshold.

Mr. Boehner told his conference that he would also like the bill to include provisions preventing the existing alternative minimum tax from expanding more to affect the middle class and extending existing tax rates on inherited estates.

But he said the bill would not cancel across-the-board spending cuts, known as sequestration, that would total $110 billion in 2013 and more than $1 trillion over 10 years.

Republicans would then resume the fight over broad spending cuts — especially to entitlement programs like Medicare — in late January or February, when the government must raise its borrowing limit, which many Republicans believe will give them much more leverage than they have now.

Mr. Boehner told Republicans on Tuesday: “Taxes are going up on everyone on Jan. 1. They’re baked into current law. And we have to stop whatever tax rate increases we can. In the absence of an alternative, as of this morning, a ‘modified Plan B’ is the plan.”

Representative Kevin McCarthy of California, the Republican whip, said his operation would be checking whether the party had the votes to pass any tax legislation. If Democrats stay united against the $1 million threshold, it could fail because some Republicans are unlikely to ever vote for a tax increase. Representative Nancy Pelosi of California, the Democratic leader, met with House Democrats on Tuesday and urged unity against the speaker’s plan.

The White House came out strongly against the speaker’s move. The White House press secretary, Jay Carney, said “Plan B” could not pass the Senate and “therefore will not protect middle-class families” from large tax increases beginning Jan. 1.

“The president has put a balanced, reasonable proposal on the table that achieves significant deficit reduction and reflects real compromise by meeting the Republicans halfway on revenue and more than halfway on spending from where each side started,” he said. “That is the essence of compromise.”

It is not clear how much this alternative plan is real or a bargaining tactic to extract more concessions from Mr. Obama. Rob Nabors, the president’s chief liaison to Congress, met with House Democrats on Tuesday and said talks were moving forward. But privately, he expressed pessimism that Mr. Boehner could sign on to any deal, according to people familiar with those conversations.

In spite of statements to the contrary just a week ago, House Republicans on Tuesday seemed almost uniformly resigned to some sort of tax rate increases on the nation’s highest earners, though they remained committed to keeping that group as small as possible. “The principle of trying to limit the increases is a good one,” said Representative Jason Chaffetz of Utah. “But now we’ve got to see more spending cuts.”

Jennifer Steinhauer contributed reporting.

Article source: http://www.nytimes.com/2012/12/19/us/politics/backing-off-deal-boehner-invokes-plan-b-on-taxes.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Jobs Report Becomes Latest Fodder in Fiscal Debate

December 8, 2012 by Leave a Comment

Mr. Boehner, meeting with reporters, declined to rule out a rise in the top income tax rate below the level President Obama wants, only to reiterate later that his opposition to tax rate increases remained unchanged. That suggested a possibility that although he opposes higher tax rates, they could still end up in a final package, given enough compromise by the White House on spending.

“There are a lot of things that are possible to put the revenue that the president seeks on the table,” Mr. Boehner said when asked about an increase in the top tax rate short of the 39.6 percent level of the Clinton era. “But none of it’s going to be possible if the president insists on his position, insists on ‘my way or the highway.’ ”

Mr. Boehner later released a statement saying: “As I’ve said many, many, many times: I oppose tax rate increases because tax rate increases cost American jobs. That has not changed, and will not change.”

Publicly neither side indicated progress toward a deal ahead of the end-of-the-month deadline for averting a series of automatic tax increases and spending cuts. But talks continued. Representative Nancy Pelosi of California, the House Democratic leader, met with Mr. Obama at the White House for private consultations.

Mr. Boehner put the onus on the president to make the next move. “This isn’t a progress report, because there’s no progress to report,” he told reporters outside his suite of offices in the Capitol. “The White House has wasted another week.”

The jobs report gave both sides a new talking point to press for compromise. The Labor Department on Friday said the economy added 146,000 jobs last month, and the unemployment rate fell to 7.7 percent from 7.9 percent in October. Those numbers were unexpectedly bright, given the impact of Hurricane Sandy and business fears about the potential fiscal crisis next month.

Mr. Boehner continued to say that his opposition to allowing the top two rates to rise from 33 percent and 35 percent to 36 percent and 39.6 percent stems from fears of the impact on small businesses that pay ordinary income tax rates, not the corporate tax rate. About 97 percent of small businesses do not turn enough profit to be affected, but Republicans note that more than half of small-business income — from the most profitable businesses, partnerships and limited liability corporations — would be hit by the increases.

“The risk the president wants us to take with increases of tax rates will hit many small businesses that create 50 to 70 percent of the jobs in our country,” Mr. Boehner said. “That’s the whole issue.”

Ms. Pelosi countered that after 33 straight months of gains in private-sector jobs, employment was now threatened by Republican refusal to pass Senate legislation extending Bush-era tax cuts for 98 percent of American households — but not the top 2 percent.

“The only obstacle standing in the way of middle-income tax relief are Republicans’ unwillingness to ask the top 2 percent to pay their fair share,” she said.

Senior House Republican aides say they will not move an inch more toward Mr. Obama unless he spells out immediate spending cuts for 2013. Even if Republicans agreed to the president’s request on higher tax rates for the rich, a deal would still be about $42 billion short of the $110 billion “down payment” Republican leaders need to pass legislation canceling next year’s across-the-board spending cuts.

“It would be an embarrassment to move further when the president is moving the opposite way,” a senior Republican leadership aide said.

Meanwhile, cracks emerged in the pressure campaign the White House is trying to assemble. A coalition of philanthropies refused publicly on Friday to join White House-organized efforts to raise the heat on Republicans in a show of moxie that portends poorly for any effort next year to tackle one of the largest tax benefits for the rich, the charitable deduction.

The coalition, the Alliance for Charitable Reform, said in a statement that it “refuses to go along with the White House’s request for charities to insert themselves into the debate over tax rates.”

“Our priority is to preserve and protect the charitable deduction,” it said. “Throughout his first term, President Obama has proposed reducing itemized deductions, including the charitable deduction, in multiple budgets and other spending proposals, and never voiced concern over the impact of his plan on the charitable sector.”

Alison Hawkins, a spokeswoman for the alliance, said White House officials had asked nonprofits to publicly oppose a Republican proposal to cap tax deductions at $25,000 instead of raising rates, and instead to press for higher upper-income tax rates to save government programs that partner with charities. Administration officials wanted charitable organizations to write letters to the editor and opinion articles and mount social media campaigns to amplify Mr. Obama’s message.

Such a public unmasking of a White House request is highly unusual, but charities have been at odds with the president on taxes ever since his first year in office, when he proposed capping tax deductions at 28 percent. Taxpayers in the 35-percent tax bracket are currently allowed to deduct 35 percent of charitable giving from their taxes, a policy the White House maintains is unfair to middle-class taxpayers in a lower bracket.

The 28-percent bracket was part of the president’s deficit-reduction offer last month.

Article source: http://www.nytimes.com/2012/12/08/us/politics/jobs-report-becomes-latest-fodder-in-fiscal-debate.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Lawmakers Renew Push for Deal on Cutting Deficit

July 24, 2011 by Leave a Comment

“We are working, and I’m confident there will be resolution,” Mr. Boehner told fellow House Republicans on an afternoon conference call, according to participants. “There has to be.”

Yet an hourlong Saturday meeting in Mr. Boehner’s Capitol suite was followed by pessimistic assessments of the state of negotiations from the two top Congressional Democrats, Senator Harry Reid, the majority leader, and Representative Nancy Pelosi, the minority leader. They accused Republicans of refusing to give ground on how the federal debt limit would be raised.

“Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States,” Mr. Reid said of Mr. Boehner and Senator Mitch McConnell, the Senate Republican leader who also attended the session. “We have run out of time for politics. Now is the time for cooperation.”

The impasse over major elements of the agreement came even as lawmakers said they were determined to make a new compromise public on Sunday afternoon before the opening of financial markets in Asia to reassure investors there.

President Obama began a morning meeting with Congressional leaders at the White House by noting that global markets could react adversely to Friday’s collapse of his and Mr. Boehner’s negotiations as early as Sunday, before trading begins in Asia. His Treasury secretary, Timothy F. Geithner, reinforced the point at the meeting’s end.

The tense series of high-powered meetings on Saturday was reflective of the sense of urgency among lawmakers with little more than a week before the federal government risks defaulting on its debts, a fate that could be avoided if Congress agrees to increase the $14.3 trillion debt ceiling. Congressional Republicans, Democrats and Mr. Obama have seized on the debt fight as a way to win approval of a debt-reduction package but have disagreed sharply over what it should include.

The speaker, who abruptly broke off budget talks with Mr. Obama on Friday evening, said that he hoped the plan could be finished within 24 hours and indicated on the conference call with House members that the savings would most likely be achieved in two stages. As described by knowledgeable Congressional aides, the agreement under discussion would enact a first round of cuts of just under $1 trillion, an amount they said was sufficient to clear the way for a debt limit increase through 2011. A second increase would follow after a newly created legislative commission considered a broader range of spending cuts, program overhauls and potential revenue increases.

Democrats, who have dug in against anything they see as a short-term extension that would require multiple votes on the debt increase before the end of next year, said they accepted the two-stage plan but wanted the full increase in the debt limit now.

“I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi,” Mr. Reid said in a written statement earlier on Saturday. “We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.”

Following Mr. Reid’s criticism, Republican officials said they have for months stuck to a consistent position demanding that each dollar increase in the debt ceiling be offset with a dollar in savings. They did not appear ready to abandon that position, with a spokesman for Mr. Boehner saying a two-step process was “inevitable.”

Still, the spokesman, Michael Steel, said that “we continue to believe that defaulting on the full faith and credit of the United States is not an option.” An aide to Mr. McConnell said the negotiations aimed at preventing a default would continue.

Mr. Reid and the other leaders met at the White House on Saturday morning at the request of Mr. Obama. The meeting broke up without resolution just before noon, after about an hour of discussion.

In a statement after the White House session, Mr. McConnell indicated that he and his leadership counterparts were intent on devising a fallback measure to assure the borrowing ceiling was raised in time.

“The president wanted to know that there was a plan for preventing national default. The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending,” Mr. McConnell said.

The White House, in its own statement, said that Mr. Obama reiterated his opposition to a short-term extension of the ceiling because it would hurt the economy, prompt rating agencies to downgrade the nation’s credit rating and drive up interest rates for all Americans.

“As the current situation makes clear, it would be irresponsible to put our country and economy at risk again in just a few short months with another battle over raising the debt ceiling,” the White House statement said.

The rancorous ending to the debt discussions on Friday means that leaders of the House and Senate now have only days to find a debt limit solution that has eluded them for months, gaming out ways to get a debt increase through a Republican-controlled House packed with conservatives demanding deep cuts and no new revenues.

Republicans were taking pains to show that the new plan was different from an earlier proposal by Mr. McConnell that would allow Congress to clear a debt increase through a procedural maneuver.

Under that approach, Congress could vote to disapprove the debt increase but allow Mr. Obama to veto the plan and get a rise in the ceiling if the House or Senate failed to override the veto, a very likely outcome. Aides said, however, that the developing proposal was likely to be modeled in some part on the McConnell approach, which had run into resistance in the House and from conservative activists.

In weeks of negotiations, House and Senate members have identified more than $1 trillion in savings that they could agree on, including cuts in federal agency budgets, farm subsidies, federal pension benefits and Medicaid.

If the new talks collapse, House Republicans could ultimately devise an extension based on cuts they identify and send it to the Senate, daring lawmakers to reject it or the president to veto it.

Article source: http://feeds.nytimes.com/click.phdo?i=86f5fe73f35e487258d211d8baeb101e

Filed Under: Business News Tagged With: , ,

Lawmakers Renew Push to Reach Deal on Cutting Deficit

July 23, 2011 by Leave a Comment

“We are working, and I’m confident there will be resolution,” Mr. Boehner told fellow House Republicans on an afternoon conference call, according to participants. “There has to be.”

Mr. Boehner’s comments came a little more than a week before the federal government risks defaulting on its debts, a fate that could be avoided if Congress agrees to increase the $14.3 trillion debt ceiling.

The speaker, who abruptly broke off budget talks with President Obama on Friday evening, said he hoped the plan could be finished within 24 hours. He said the savings would most likely be achieved in two stages and would meet Republican fiscal demands that have led to a Congressional cliffhanger on the debt limit.

He spoke with his colleagues after Congressional leaders met at the White House on Saturday morning at the request of Mr. Obama. The meeting broke up without resolution just before noon, after about an hour of discussion.

Lawmakers and top aides said privately that despite the White House session, the search for a solution was now focused on Capitol Hill, where senior advisers gathered Saturday afternoon to exchange ideas on a plan that could get the go-ahead from top members of Congress.

In a statement after the White House session, Senator Mitch McConnell of Kentucky, the Republican leader, indicated that he and his leadership counterparts were trying to devise a fallback measure to assure the borrowing ceiling was raised in time.

“The president wanted to know that there was a plan for preventing national default. The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending,” Mr. McConnell said.

The White House, in its own statement, said that Mr. Obama reiterated his opposition to a short-term extension of the ceiling — he wants a level that would carry the Treasury through the 2012 elections — because it would hurt the economy, prompt rating agencies to downgrade the nation’s credit rating and drive up interest rates for all Americans.

“As the current situation makes clear, it would be irresponsible to put our country and economy at risk again in just a few short months with another battle over raising the debt ceiling,” the White House statement said.

Conversations were to continue through Saturday, the White House said. But Congressional aides said that talks between senior advisers to House and Senate leaders began Friday as soon as it became clear that negotiations between Mr. Obama and Mr. Boehner had broken down, leaving Congress with no clear route to a debt limit increase and time running short.

The rancorous ending to the debt discussions on Friday means that leaders of the House and Senate now have only days to find a debt limit solution that has eluded them for months, gaming out ways to get a debt increase through a Republican-controlled House packed with conservatives demanding deep cuts and no new revenues.

They must do so in a way that calms markets that may be jittery after the halt in the talks just days before the Aug. 2 deadline. The drama played out in real time on television Friday night in extraordinary exchanges between Mr. Obama and Mr. Boehner, who has told his colleagues that the House needs to begin moving by Monday to give the Senate time to act.

In his weekly address on Saturday, Mr. Obama urged Republicans to accept additional new revenues — a key sticking point in the negotiations — as a way to balance the cuts he described as substantial.

“We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future,” he said. “Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”

Republicans countered that the emphasis needed to be on cutting government spending.

Article source: http://feeds.nytimes.com/click.phdo?i=86f5fe73f35e487258d211d8baeb101e

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