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House Set to Vote on Boehner’s Fiscal ‘Plan B’ G.O.P. Leaders Head Toward House Vote on Boehner ‘Plan B’
(about 4 hours later)
WASHINGTON — House Republican leaders, after three difficult days of wrangling support, headed toward a vote on Thursday on Speaker John A. Boehner’s backup plan to avert a fiscal crisis by canceling January tax increases for all but the wealthiest Americans, while leaving the tougher fights on spending to future battles. WASHINGTON — The House narrowly voted to take up Speaker John A. Boehner’s backup plan to avert a fiscal crisis, moving toward a Thursday night vote on a measure that would avoid January tax increases for all but the wealthiest Americans. The closeness of the procedural vote highlighted how difficult even those tax increases would be for some Republicans to swallow.
With broader budget talks between the speaker and President Obama stalled, the speaker told reporters he would instead force through a measure that would extend Bush-era tax cuts on income below $1 million in an effort to put pressure on the Democratic-controlled Senate to avert a year-end collision of automatic tax increases and spending cuts. After three difficult days of wrangling support, the House voted 219 to 197 on a motion establishing the rules for debate on what has become known as “Plan B.” Thirteen Republicans bolted from their leadership to vote “no,” presaging an even more difficult fight when the bill comes to a final vote. So far, 23 Republicans have publicly said they were either leaning against the bill or were firmly against it, enough to bring it down without Democratic support.
“After today, Senate Democrats and the White House are going to have to act on this measure,” Mr. Boehner said as the House prepared for a tense series of votes. But the speaker’s team of vote counters were pressing hard, fearing that a defeat on Thursday would severely undercut Mr. Boehner’s hand as he tries to find a deficit reduction deal with President Obama.
The vote on what the speaker has dubbed “Plan B” is expected to be close and is unlikely to draw much Democratic support. But Republican leaders predicted it would pass along with a separate measure to cancel automatic Pentagon cuts in 2013 with even deeper cuts to domestic programs. With just days to go before more than a half trillion dollars in tax increases and spending cuts kick in, a chasm separates congressional Republicans from President Obama, even though the latest deficit offers from the president and speaker are numerically very close. With broader budget talks between the speaker and Mr. Obama stalled, the speaker vowed to force through his measure, which would extend Bush-era tax cuts on income below $1 million in an effort to put pressure on the Democratic-controlled Senate to avert a year-end collision of automatic tax increases and spending cuts. Republican leaders predicted it would pass, along with a separate measure to cancel automatic Pentagon cuts in 2013 and even deeper cuts to domestic programs.
“We House Republicans are taking concrete actions to avoid the fiscal cliff,” Representative Eric Cantor of Virginia, the No. 2 House Republican, said Thursday. “Absent a balanced offer from the president, this is our nation’s best option, and Senate Democrats should take up both of these measures immediately.” “I’ve done my part,” Mr. Boehner declared before the vote, putting the ball in the Democrats’ court. “They’ve done nothing.”
Senator Harry Reid of Nevada, the Senate majority leader, accused House Republicans of wasting almost a week on “pointless political stunts” and said he would not bring the House measure to the Senate floor even if it passed the House. He was making plans to bring the Senate back after Christmas in case of a breakthrough as the fiscal deadline approached. With just days to go before more than a half trillion dollars in tax increases and spending cuts kick in, a chasm separates congressional Republicans from President Obama, even though the latest deficit offers from the president and the speaker are numerically very close.
“Get back and start talking to the president,” he told House Republicans. The struggle to win Republican support for a measure that would allow income taxes to rise on a sliver of the top one percent of taxpayers telegraphed a grave decision for the speaker. A deal with the president would almost certainly lose a huge swath of his Republican conference, but it could pass with Democratic support. Does he make that deal and risk a Republican revolt, or do leaders allow the nation to careen off the so-called fiscal cliff?
What happens next will determine whether Washington can avert that so-called fiscal cliff in the first days of the new year. The 13 Republican “no” votes on the procedural motion included members who have long been a thorn in the speaker’s side, including three members his leadership recently threw off their committees: Representatives Justin Amash of Michigan, Tim Huelskamp of Kansas and Walter Jones of North Carolina. But they also included influential conservatives like Representative Jim Jordan of Ohio, who heads the conservative Republican Study Committee, and backbenchers like Representative Trent Franks of Arizona, not known as trouble for the leadership.
Democrats — and many Republicans — hope a vote on the Boehner backup plan will usher in a last and final round of negotiations between the speaker and President Obama over a broad deficit reduction deal that raises more than $1 trillion in taxes over ten years while locking in another $1 trillion in savings from entitlements like Medicare and other federal programs. Mr. Cantor pointedly said he will not send House members home for the holidays after Thursday night’s vote. Jay Carney, the White House press secretary, accused the speaker of failing to keep his Republican troops in line behind his budget offers, the latest of which promised $1 trillion in new revenues over 10 years.
What happens next will determine whether Washington can avert a fiscal crisis in the first days of the new year.
Democrats — and many Republicans — hope a vote on the Boehner backup plan will usher in a last and final round of negotiations between the speaker and President Obama over a broad deficit reduction deal that raises more than $1 trillion in taxes over ten years while locking in another $1 trillion in savings from entitlements like Medicare and other federal programs. Representative Eric Cantor, the majority leader, pointedly said he will not send House members home for the holidays after Thursday night’s vote.
“It’s always darkest before the dawn,” said Senator Charles E. Schumer of New York, the third-ranking Democrat. “A grand bargain is more likely than not before the end of the year.”“It’s always darkest before the dawn,” said Senator Charles E. Schumer of New York, the third-ranking Democrat. “A grand bargain is more likely than not before the end of the year.”
But other lawmakers fear most House Republicans will see passage of legislation that extends Bush-era tax cuts for household incomes below $1 million as their final offer in efforts to avert a fiscal crisis. House Republican leadership aides made clear that if the bill passes, the speaker believes the next move will have to come from Senate Democrats and the president. Senate Democrats could simply take up and pass the House bill or amend it more to their liking and send it back to the House. But other lawmakers fear that most House Republicans will see passage of legislation that extends Bush-era tax cuts for household incomes below $1 million as their final offer. House Republican leadership aides made clear that if the bill passes, the speaker believes the next move will have to come from Senate Democrats and the president. Senate Democrats could simply take up and pass the House bill or amend it more to their liking and send it back to the House.
“The House is going to pass a bill that protects more than 99 percent of Americans from a tax hike Democrats want to slap them with in two weeks,” Senator Mitch McConnell of Kentucky, the Senate Republican leader, said Thursday. “The president is determined to leap off the cliff. Well, we’re not going to let him take the middle class with him.”“The House is going to pass a bill that protects more than 99 percent of Americans from a tax hike Democrats want to slap them with in two weeks,” Senator Mitch McConnell of Kentucky, the Senate Republican leader, said Thursday. “The president is determined to leap off the cliff. Well, we’re not going to let him take the middle class with him.”
But Democrats say the measure raises taxes only slightly on a tiny sliver of the wealthiest Americans, while increasing taxes more broadly on the middle class. That is because the bill permanently repeals measures that limit deductions and credits for affluent households, at a cost to the Treasury of $163 billion over 10 years. But it allows tax breaks for the middle class, passed as part of the 2009 stimulus law, to expire. Those include an expanded tax credit for college tuition and refunds for the working poor. But Democrats say the measure raises taxes on a minute portion of the wealthiest Americans, while increasing taxes more broadly on the middle class. That is because the bill permanently repeals measures that limit deductions and credits for affluent households, at a cost to the Treasury of $163 billion over 10 years. But it allows tax breaks for the middle class, passed as part of the 2009 stimulus law, to expire. Those include an expanded tax credit for college tuition and refunds for the working poor.
Senate Democratic leaders said Mr. Boehner should put to a vote a Senate-passed bill that would allow tax rates to expire on incomes over $250,000 while extending a variety of middle-class tax cuts not included in the House bill.Senate Democratic leaders said Mr. Boehner should put to a vote a Senate-passed bill that would allow tax rates to expire on incomes over $250,000 while extending a variety of middle-class tax cuts not included in the House bill.
“Until Republicans take up our bill, there’s nothing to discuss,” Mr. Reid said. “It’s time for Republicans to get serious.”“Until Republicans take up our bill, there’s nothing to discuss,” Mr. Reid said. “It’s time for Republicans to get serious.”
The House was to vote Thursday on two bills to deal with the pending fiscal crisis. The first mirrors legislation the House passed in May to cut $310 billion from the deficit over the next decade — much of it from programs for the poor — and shift some of that savings to the Pentagon to stave off automatic military spending cuts scheduled for next year.The House was to vote Thursday on two bills to deal with the pending fiscal crisis. The first mirrors legislation the House passed in May to cut $310 billion from the deficit over the next decade — much of it from programs for the poor — and shift some of that savings to the Pentagon to stave off automatic military spending cuts scheduled for next year.
That was hastily added to the House calendar on Wednesday to alleviate anger from conservatives that the House would vote on legislation effectively raising taxes on millionaires while not cutting a penny in spending, and from military hawks worried that “Plan B” does not avert $50 billion in across-the-board defense cuts.That was hastily added to the House calendar on Wednesday to alleviate anger from conservatives that the House would vote on legislation effectively raising taxes on millionaires while not cutting a penny in spending, and from military hawks worried that “Plan B” does not avert $50 billion in across-the-board defense cuts.
The second bill, totaling $3.9 trillion in tax-cut extensions over 10 years, would preserve Bush-era income, capital gains and dividend tax cuts permanently to all household incomes up to $1 million. At that level, income tax rates would rise from to 39.6 percent from 35 percent and dividend and capital gains taxes would rise to 20 percent from 15 percent. The current estate tax level – 35 percent on the value of estates above $5 million for individuals, $10 million for couples – would be extended permanently.The second bill, totaling $3.9 trillion in tax-cut extensions over 10 years, would preserve Bush-era income, capital gains and dividend tax cuts permanently to all household incomes up to $1 million. At that level, income tax rates would rise from to 39.6 percent from 35 percent and dividend and capital gains taxes would rise to 20 percent from 15 percent. The current estate tax level – 35 percent on the value of estates above $5 million for individuals, $10 million for couples – would be extended permanently.
The bill also permanently stops the alternative minimum tax — a parallel income tax system designed to set a floor for taxes paid by the rich — from expanding to hit more of the middle class. And it permanently expands the amount of investments small businesses can write off their taxes.The bill also permanently stops the alternative minimum tax — a parallel income tax system designed to set a floor for taxes paid by the rich — from expanding to hit more of the middle class. And it permanently expands the amount of investments small businesses can write off their taxes.