House Speaker John Boehner this morning told his Republican caucus that he will take up “Plan B,” under which the House will simply pass its own legislation to increase tax rates for those earning more than $1 million and leave it at Harry Reid’s doorstep in the Senate.
The bill could move by the end of the week. But it’s mainly a tough negotiating ploy, an effort to get President Obama to agree to a higher threshold for tax rate increases. Obama, who had said those making over 250,000 per year should see their tax rates go up, is now at $400,000. Boehner wants more.
Obama also has agreed to new spending cuts and a new way to calculate cost of living increases that will reduce entitlement spending. But Boehner is using the prospect of a passing a simple tax cut bill – which will leave dramatic “fiscal cliff” spending cuts in place – in order t0 up the pressure on Obama.
The move suggests Boehner and the GOP leadership understand that they have more leverage in the negotiations than they’ve given themselves credit for, since a trip over the fiscal cliff will potentially cause a new recession and ruin Obama’s second term plans.
Reid and the White House have already rejected the “Plan B” bill. But they know the measure will tell public that Republicans at least tried to do something.
That’s why negotiations are continuing, and the two sides continue to move closer to a deal.