5:11am

Wed December 19, 2012
Economy

Boehner Pushes 'Plan B' To Avoid 'Fiscal Cliff'

Originally published on Thu December 20, 2012 5:44 am

Transcript

STEVE INSKEEP, HOST:

It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.

DAVID GREENE, HOST:

And I'm David Greene.

Steve, welcome back. It's good to see you.

INSKEEP: Oh, it's a delight to be here, David. Thanks very much.

GREENE: I can tell you, you did not miss any resolution to the fiscal cliff debate here in Washington.

INSKEEP: I was actually hoping you'd fixed that while I was gone. You didn't?

(LAUGHTER)

GREENE: No. And it's actually taken a whole new turn. House Speaker John Boehner is pushing what he's calling a Plan B, which the White House has threatened to veto.

Here's NPR's Tamara Keith.

TAMARA KEITH, BYLINE: By the numbers, Boehner and the president are close. But close isn't a done deal. And so Boehner says he's got a backup plan: a bill that would extend the Bush-era tax cuts for the vast majority of taxpayers on income up to a million dollars a year.

REPRESENTATIVE JOHN BOEHNER: To make sure that as few American taxpayers are affected by this increase as possible, moving down that path is the right course of action for us.

KEITH: But it's not an entirely obvious course. Boehner's Plan B will allow tax rates to rise on the highest income Americans - something he and his conference have long resisted. It would also raise taxes on capital gains and dividends to 20 percent, from the current rate of 15.

Steve LaTourette is a Republican from Ohio.

REPRESENTATIVE STEVE LATOURETTE: The speaker and the leader were emphatic that, look, taxes are going up. And the question is on how many people. And so those of you that continue to sit back and say there's not going to be any tax increase, you need to get that - you need to get that out of your head.

KEITH: And so as House Republicans left a meeting where this Plan B was outlined, they were remarkably on message, with everyone who stopped to talk to reporters making more or less the same point.

REPRESENTATIVE STEVE WOMACK: By law, taxes are going up.

KEITH: Steve Womack is a Republican from Arkansas.

WOMACK: This is an opportunity for our conference to do what we can to save as many Americans from a tax increase on January 1 as we possibly can.

KEITH: Some Republicans have been quietly pushing for this course for some time now. Jeff Flake from Arizona says Plan B allows them to reset the narrative - a narrative that hasn't helped the GOP image.

REPRESENTATIVE JEFF FLAKE: A lot of us believe that we'll only get spending once we aren't considered the party of the two percent.

KEITH: This backup plan deal only deals with taxes. It doesn't extend unemployment benefits. It's doesn't deal with spending cuts. And it doesn't raise the debt ceiling, which needs to be done by mid-February. And that's just the way Flake wants it.

FLAKE: There's a lot the president needs, and there's room for negotiation, as soon as we get this revenue thing off the table.

KEITH: But not everyone in the House GOP agrees. John Fleming is a Tea Party Republican from Louisiana.

REPRESENTATIVE JOHN FLEMING: I don't quite follow how going on record for the first time in 100 years raising taxes on anybody without any spending cuts, which is really what we think is the problem - the need for spending cuts - and it ever even passing into law, I'm not sure how that really gains anything.

KEITH: And he has a point about its chances of becoming a law.

SENATOR HARRY REID: Boehner's proposal will not pass the Senate.

KEITH: So says Senate Majority Leader Harry Reid.

REID: We should be focusing our energy forging a large scale balanced approach to deficit reduction.

KEITH: A deal that White House Spokesman Jay Carney says is so close.

JAY CARNEY: It seems like folly to walk away from that opportunity because you don't want to ask somebody making $995,000 a year to pay a dime more in income taxes. It seems like terrible folly and I don't think the American people would support that.

KEITH: For his part, Boehner says a deal with the president would be best for the country. And Ohio's Steve LaTourette, who is retiring after this year, says it would be better for the politicians too.

LATOURETTE: The Democrats can blame us for the spending cuts. We can blame them for the tax increases. It really is the most perfect vote you could pass. But we're not there yet.

KEITH: Plan B is set to come up for a vote on Thursday. But a lot can happen before then - because as both sides keep saying, the lines of communication are open.

Tamara Keith, NPR News, the Capitol. Transcript provided by NPR, Copyright National Public Radio.