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House GOP plans vote on fiscal cliff 'Plan B'

Published on NewsOK Modified: December 20, 2012 at 12:24 pm •  Published: December 20, 2012
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For their part, Democrats who supported the million-dollar threshold not too long ago have lashed themselves to Obama, who carries great leverage into the battle about the fiscal cliff, the price to pay for Washington's chronic inability to address the deficit.

GOP leaders have also set a vote on a companion bill to replace across-the-board cuts in the Pentagon and some domestic programs with targeted reductions elsewhere in the budget, an attempt to satisfy defense-minded lawmakers and conservatives eager to vote for spending cuts.

That measure, which passed the House in May only to be ignored by the Senate, would cut food stamps, benefits for federal workers and social services programs like day care for children and Meals on Wheels for the elderly. It would spare the military from a $55 billion, 9 percent automatic budget cut next year that is punishment for the failure of last year's deficit-reduction "supercommittee" to strike a deal. It also would protect domestic agencies from an 8 percent cut to their day-to-day operating budgets next year, but would leave in place a 2 percent cut to Medicare providers.

With Christmas approaching, Republicans also said they were hopeful the tax measure could quickly form the basis for a final bipartisan "fiscal cliff" compromise once it arrives in the Senate.

On paper, the two sides are relatively close to an agreement on major issues, each having offered concessions in an intensive round of talks that began late last week.

But political considerations are substantial, particularly for Republicans.

After two decades of resolutely opposing any tax increases, Boehner is seeking votes from fellow Republicans for legislation that tacitly lets rates rise on million-dollar income tax filers. The measure would raise revenue by slightly more than $300 billion over a decade than if all of the Bush-era tax cuts remained in effect.

Boehner won a letter of cramped support from anti-tax activist Grover Norquist during the day. Norquist's organization, Americans For Tax Reform, issued a statement saying it will not consider a vote for the bill a violation of a no-tax-increase pledge that many Republicans have signed.

The talks have stalled even though Obama and Boehner have each made concessions that would seem to bring them to the brink of agreement. Obama is now seeking $1.2 trillion in higher tax revenue, down from the $1.6 trillion he initially sought. He also has softened his demand for higher tax rates on household incomes so they would apply to incomes over $400,000 instead of the $250,000 he cited during his successful campaign for a new term.

He also has offered more than $800 billion in spending cuts over a decade, half of it from Medicare and Medicaid, $200 million from farm and other benefit programs, $100 billion from defense and $100 billion from a broad swath of government accounts ranging from parks to transportation to education.

In a key concession to Republicans, the president also has agreed to slow the rise in cost-of-living increases in Social Security and other benefit programs, at a savings estimated at about $130 billion over a decade.

By contrast, Boehner's most recent offer allowed for $1 trillion in higher taxes over a decade, with higher rates for annual incomes over $1 million. His latest offer seeks about $1 trillion in spending cuts.