In the ongoing negotiations to avoid the Fiscal Cliff, Speaker John Boehner called the president’s bluff this morning when he indicated that the House will be voting on “Plan B” tomorrow.
The move came as talks between Boehner and Obama suddenly hit a standstill. Boehner’s decision on Tuesday to put forward the “Plan B” — which would raise taxes only on those making over $1 million, and preserve current rates for everyone else — angered the White House. On Wednesday morning, the White House issued a formal veto threat, as the president urged Republicans during a press conference to “peel off the partisan war paint.”
In response to the president’s criticism and resistance, Boehner called a press conference — which lasted less than one minute — to declare the House was moving forward and put the onus on the president to get Democrats on board.
“Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American,” Boehner said. “Then the president will have a decision to make. He can call on the Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history.”
As I noted yesterday, the White House is not too happy with this turn of events. Why? because it removes the president’s biggest bargaining chip in these negotiations: the expiration of the Bush Tax Cuts (as an aside, these tax rates have been in effect for a decade now; shouldn’t we simply call them “the existing tax rates”?). It’s pretty simple. If a plan that the president likes (read: a plan in which he gets everything he wants) isn’t passed before the cuts expire, taxes go up on everyone. The president is well aware that conservatives are generally against higher taxes the the expiration of the current rates have two effects. First, it would simply make the Republicans look bad, and the leftists could push the meme by arguing the they did not keep their promise to their constituents. Second (and relatedly), the president would then be able to introduce a tax cut for the middle and lower classes (even a return to existing rates could be spun as a cut) thereby giving the left the opportunity to paint themselves as tax-cutters, even further embarassing Republicans.
However, by passing “Plan B”, Boehner gets to take the tax hike/cut issue off the table and remove any leverage the president could wring from the propect of higher taxes on the middle class. Further, by calling Obama’s bluff on his threats to veto the bill, two things can happen (both wins for the Republicans). If president signs, the Republicans can take credit for preventing higher taxes on the middle class and remove them as a bargaining chip. If the president carries out his threat to veto, as the Speaker states, he will then be responsible for the largest tax increase in American History. In my opinion, this is the smartest move (maybe the only one) that Boehner has made in these negotiations; I know the “let it burn” crowd will be less than impressed, however.
But Democrats argued in a Capitol Hill news conference that the proposal doesn’t actually accomplish that goal, saying it leaves out a number of tax cuts for people futher down the earnings scale, while letting some lesser-known tax breaks for millionaires continue.
“The ‘Plan B’ is a very flawed proposal,” Sen. Chuck Schumer (D-N.Y.) said. “It gives huge tax breaks to the wealthy, an average of $50,000 per millionaire.”
Senate Majority Leader Harry Reid of Nevada said Boehner’s backup plan appears to be a result of pressure from tea party conservatives opposing a wider deal.
“It would be a shame if Republicans abandoned productive negotiations due to pressure from the tea party, as they have time and again,” Reid said this week.
However, what is really disappointing is that there seems to be an effort to undermine Boehner on the plan because it allows for tax rates to be raised on anyboby.
Prominent conservative leaders, including former attorney general Edwin Meese III, Ken Blackwell of the Conservative Action Project, Brent Bozell of ForAmerica, Colin Hanna of Let Freedom Ring, Tony Perkins of the Family Research Council, David Bossie of Citizens United, Gary Bauer of American Values, Jim Backlin of the Christian Coalition of America, Richard Viguerie of ConservativeHQ.com, Al Regnery of the Paul Revere Project, and Andy Roth of the Club for Growth, among a myriad of others, scheduled a press conference this afternoon to denounce Speaker John Boehner’s “Plan B” tax increase for addressing the fiscal cliff. Some are accusing Grover Norquist of giving cover to the establishment to facilitate this cave-in and hand President Barack Obama a liberal victory.
The group released a statement this afternoon:
As leaders of broad based American citizen groups we call upon Republican House Members to vote no on Speaker Boehner’s Tax Hike known as “Plan B.” This tax increase bill is just like the tax increase proposal Nancy Pelosi offered last year on May 23rd.
Speaker Boehner, President Obama, Nancy Pelosi and too many Members of the Republican conference have forgotten that the problem in Washington is too much spending and not too little taxation.
When the American people voted to return the Republican majority in the House last month we sent you to cut spending. Instead, you are now voting on the Pelosi plan to increase taxes next year.
We urge Members of the House to vote no on the procedural rule to stop the Pelosi/Boehner tax plan from coming to the House floor for a vote.
Despite the opposition, the plan may pass anyway:
Conservatives, though, were equally dismayed that Boehner had dropped his absolute opposition to tax rate increases. Even for the Plan B, one Republican member told Fox News “there’s a lot of angst there” — though Republican House Leader Eric Cantor claims there are enough votes to pass it.
Granted, he’s not the conservative leader most of us would like to see (heck, I wish we had someone else as Speaker), but to get anything done, some compromise is needed. A true compromise is when each side gives a little to achieve a more important goal (for conservatives, this is spending reform). In addition, Boehner has made the best move of the negotiations to date, removing the tax bargaining chip for the president, putting the Republicans in a much better position to negotiate spending cuts (with taxes off the table, they can move that to the debt ceiling debate).
C’mon conservatives, let’s stop shooting ourselves in the foot. Rather than criticize Boehner for a tax rate increase on $1 million incomes and above, let’s put the spotlight on Obama threatening the largest middle class tax increase in history. It’s up to us to change the narrative.
Kudos to The Washington Examiner. In their latest editorial, they recognize that Plan B is probably the best deal we can get right now, and urge its passing:
Realizing that negotiations with Obama were going nowhere, Boehner introduced a Plan B to his conference yesterday that is probably the best deal conservatives can hope for. Plan B would allow tax rates to rise on incomes over $1 million a year, fix the Alternative Minimum Tax that is scheduled to hit thousands of middle-class families and reform the estate tax to protect small businesses. All told, Boehner’s Plan B would prevent tax hikes from hitting 99.81 percent of all Americans.
No, Plan B would not address the real drivers of our national debt; the big four entitlement programs, Social Security, Medicare, Medicaid and Obamacare. But as long as Obama is president, no meaningful reform of these programs is possible anyway. Republicans hope in vain if they think they can negotiate their way to a deal that includes such reform.
What Plan B does do is preserve the $1.2 trillion in spending cuts that conservatives won during the debt-limit deal. The $1.2 trillion at least includes $123 billion in Medicare cuts. That is more entitlement “reform” than Obama is currently offering.
[UPDATE II 12/20/12]
Instead, conservatives are joining with Democrats and going out to bash Boehner. Instead of placing the blame for everyone’s taxes going up on Obama and Reid, the people blocking a bill that would prevent taxes on 99.5% of taxpayers, opportunists are deciding to pass it up so they can get rid of Boehner.
Someone stop this ride. I want to get off.
We will not get any meaningful spending cuts from Obama. Ever. He not only has control of Harry Reid, he has a very willing accomplice in the media. We simply don’t have the PR apparatus to counter the cult of Obama. Pretending we do is absurd. The only thing we can do in the short term is chip away at the facade and the best way to do that is to make a lot of noise over the fact that Obama and Reid are blocking tax rate extensions on 99.5% of taxpayers.