The White House and Democratic party have rejected the “Plan B” of the Republicans, who hold majority in the US House of Representatives, arguing that this does little to address the issue of fiscal cliff.
Speaker of the US House of Representatives Republican John Boehner held talks with President Barack Obama and said that he is moving to a “Plan B”, which among other things would involve the House voting on legislation to extend tax rates on all income below $1 million.
It would increase tax rates on annual income above $1 million from current 35 per cent to 39.6 per cent.
“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,” White House Press Secretary Jay Carney said in a statement.
Arguing that Obama 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, Carney said this 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,” Carney said.
A day earlier, Obama had offered to raise income tax rates on annual income above $400,000; thus changing his previous position of increasing income tax of all those above the $250,000 income bracket.
“Speaker Boehner’s ‘Plan B’ 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,” Senate Majority Leader Harry Reid said.
“Boehner should focus his energy on forging a large-scale deficit reduction agreement. It would be a shame if Republicans abandoned productive negotiations due to pressure from the Tea Party, as they have time and again,” he said.
The Republicans did not agree with the assertions being made by either the White House or the Democratic leadership and insisted that it would move ahead with its Plan B.
“The White House offered yesterday was essentially at $1.3 trillion in new revenues for only $850 billion in net spending reductions. That’s not balanced in my opinion. So at the same time that we’re going to continue to talk with the president, we’re also going to move plan B. I think we all know that every income tax filer in America is going to pay higher rates coming January 1 unless Congress acts,” Boehner told reporters in a conference call.
“Our Plan B would protect American taxpayers who make a million dollars or less and have all of their current rates extended,” he said.