I guess the good news about the state of the fiscal slope negotiations is that nobody seems to like what’s on offer. Dick Durbin, seen as close to the President, just rejected including the chained CPI for Social Security benefits in a final deal. That rejection came even faster than the rejection of raising the Medicare eligibility age.
On the other side, John Boehner certainly doesn’t sound gracious about the White House offering 50% of the tax levels and 85-90% of the spending cuts he initially wanted out of the deal. He’s prepping a “Plan B” that would only raise tax rates on millionaires and do virtually nothing else.
Per Boehner, at a Tuesday morning press conference, flanked by his leadership team: “[It] would protect American taxpayers who make $1 million or less, and have all of their current rates extended.”
The plan serves twin purposes: to provide Republicans much-needed cover in the event that Congress can’t avoid all the austerity measures that take effect next year; and to apply some pressure to President Obama to provide more revenue and spending concessions to Republicans in broader budget negotiations.
There’s a bit of irony here. Nancy Pelosi earlier this year tried to move the dividing line on the Bush-era tax rates to $1 million, before backsliding back to the $250,000 dividing line. Now Boehner is going along with $1 million, name-checking Pelosi and Chuck Schumer in the process. But of course, this isn’t really a deal, not only because it would raise far less than half of even the White House’s last offer of $1.2 trillion in tax revenue (it would top out around $400 billion), but because it wouldn’t deal with spending or other expiring measures at all.
Harry Reid flatly rejected Plan B, saying it “is the farthest thing from a balanced approach. It will not protect middle-class families because it cannot pass both houses of Congress. The Senate bill is the only Plan B that can be signed into law and prevent taxes from rising by $2,200 on the average middle-class family.”
Similarly, the White House rejected Plan B, mainly because they’ve already compromised, they said, and because Reid doesn’t like it. This is from Press Secretary Jay Carney.
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. That is the essence of compromise. The parameters of a deal are clear, and the President is willing to continue to work with Republicans to reach a bipartisan solution that averts the fiscal cliff, protects the middle class, helps the economy, and puts our nation on a fiscally sustainable path. But he is not willing to accept a deal that doesn’t ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors. The Speaker’s “Plan B” approach doesn’t meet this test because it can’t pass the Senate and therefore will not protect middle class families, and does little to address our fiscal challenges with zero spending cuts. The President is hopeful that both sides can work out remaining differences and reach a solution so we don’t miss the opportunity in front of us today.
Keep in mind here that the White House is rejecting Plan B in part because it doesn’t have enough spending cuts.
I suppose the late fracturing makes an overall deal less likely. But sometimes it’s darkest before the dawn.