House Speaker John Boehner will move forward with a “Plan B” to avert the fiscal cliff, that includes bringing a plan to the House floor containing a tax hike for incomes over $1 million.
Politico reported that Boehner will present his fellow House Republicans with the plan today. However, that isn’t to say Boehner is refusing to negotiate with President Barack Obama. Rather, he is trying to win the support of House members – a critical component to ensuring a deal is cut and enacted into law before the Dec. 31st deadline.
Both the Senate and House must agree on a plan to avert the fiscal cliff – the automatic tax hike and spending cuts set to take effect in January unless an agreement is reached.
Signs of Obama and Boehner moving closer to a deal were visible Monday, when the speaker agreed to higher taxes for incomes over $1 million. It was a far cry from the $250,000 threshold the president sought originally, but Obama managed to get Republicans to buckle on their position against any tax increase. A final figure for the threshold for higher taxes may just be somewhere between the numbers thrown out.
Obama himself has made some concessions, with the White House willing to accept unchanged tax rates for incomes below $400,000 a year. Additional revenue could come from fewer deductions and possibly later, tax reform.
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Before the two sides began making concessions, there was much uncertainty about whether the U.S. would go over the cliff, which could have provoked a new recession, sending unemployment rates up to 9 percent in 2013. That uncertainty hasn't been removed, but an agreement appears closer.
Sources told Politico that Boehner will argue to House Republicans that absent an agreement, taxes would rise for everybody in January, leaving the question, “How do we stop as many of those rate hikes as possible?”