House GOP Opt for ‘Plan B’: Little Chance of Agreement Before Christmas

Prospects for a budget agreement before Christmas looked slim as the House moved towards a vote on Speaker John Boehner’s plan for limiting tax increases by raising rates only for those making more than $1 million. Jeffrey Brown talks to Norman Ornstein of American Enterprise Institute and political editor Christina Bellantoni.

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    The U.S. House of Representatives debated into the evening on a tax plan that most Republicans backed and Democrats said was a waste of time. The division demonstrated that efforts to get a bipartisan agreement and avoid the fiscal cliff are stuck in stalemate.

  • MAN:

    The House will be in order.


    House Republicans pushed their so-called plan B, despite a veto threat from the White House and the strong opposition of Senate Democrats.

    Speaker John Boehner insisted the president had left him with no alternative.


    And for weeks, the White House said that if I moved on rates, that they would make substantial concessions on spending cuts and entitlement reforms. I did my part. They have done nothing.


    The public sniping continued. At the White House, Press Secretary Jay Carney fired back that the president had shown more of a willingness to compromise than Republicans have.

  • JAY CARNEY, White House:

    He never said, either in private or in public, that this was his final offer. He understands that to reach a deal it would require some further negotiation. There is not much further he could go, because, after all, unlike his counterparts in this negotiation, he has already gone halfway on both sides of the equation.


    The president would raise tax rates on households making at least $400,000 a year. By contrast, Boehner's plan B pegs that threshold at $1 million a year.

    It also drops the $1,000 child tax credit for families who don't earn enough to pay federal income taxes. And it would let an expansion of the college tuition tax credit expire. Republicans argue that both those provisions were to have been temporary anyway under the president's original stimulus package.

    Initially, Boehner's plan did nothing to stop across-the-board spending cuts that take effect in the new year, under the fiscal cliff's mandates. But, today, Republican leaders offered a companion bill to replace $55 billion in automatic cuts to defense spending. Those would be swapped out for additional reductions in domestic programs.

    House Majority Leader Eric Cantor predicted both measures would pass.


    We hope that the Senate will take this bill up, along with the spending reduction act, and get the job done, in lieu of or absent any kind of agreement coming from the White House.


    Some Republican members, such as Tim Huelskamp of Kansas, still had strong objections.


    I do not support plan B. Apparently, it was amended late last night. I still do not support it. Point being is, there is a pretty big tax increase still in there. And it's always been a long principle of mine, as well as most in the Republican Party, that we don't raise taxes and that we look at the spending side.


    But when floor debate began this afternoon, the leadership lined up Republicans who supported the measure.

  • REP. PAT TIBERI, R-Ohio:

    Mr. Speaker, this is the right medicine for 99.8 percent of Americans, to prevent them from seeing their taxes go up on January 1. And it gives us an opportunity in the next session of Congress to provide comprehensive tax reform that will simplify our tax code.


    On the other side of the aisle, Democrats like Gary Peters of Michigan said the fine print in the GOP plan does real harm.

  • REP. GARY PETERS, D-Mich.:

    Christmas is a time of giving, but, sadly, Republicans are taking, taking food off the table from millions of American families that are struggling in these tough economic times by cutting food assistance by $36 billion, taking the unemployment lifeline away from more than two million Americans who are trying to get back on their feet.


    And in the Senate, Democratic Majority Leader Harry Reid warned today the Boehner plan is a — quote — "nonstarter" in his chamber.

  • SEN. HARRY REID, D-Nev.:

    We're not taking up any of the things that they were working on over there now. It's time for Republicans to get serious. It's very, very, very unfortunate that Republicans have wasted an entire week on a number of pointless political stunts, and that's what they have been.


    As the day wound down, then, there appeared to be little prospect for any agreement, at least before Christmas.

    So, what's going on and where do things stand?

    Joining me now, Norman Ornstein, a longtime watcher of Congress and a scholar at the American Enterprise Institute, and NewsHour political editor Christina Bellantoni.

    Christina, what are we watching today? What's going on? What's the thinking on what's up in the House of Representatives tonight?


    Well, a lot of people are a little confused by what Speaker Boehner is trying to do here, because we have got plenty of — plenty of time is probably not the right word to use, but there's a lot of time, in congressional terms, when it comes to the urgency of this fiscal cliff matter.

    So they're having a vote before they leave for Christmas on a plan that a lot of Republicans are signing on to because they feel like they have to.

    But when they hold these votes later and later into the evening, that's a signal that they're not quite there yet. And that's what you're seeing happen today.

    And this companion bill you mentioned in that piece there, that's where you're seeing a lot of the deal-making go on.

    You have got the leadership team adding to that, putting little sweeteners in, little things here and there, but, politically, it's a dangerous move for some of these Republicans, because this bill, the two companion bills, give both Democrats and Republicans something to campaign against for these members who vote for it.

    They're raising taxes on millionaires, but then they're also cutting some spending programs, a lot of these domestic programs that are actually popular back home.


    I said Ornstein. I meant Ornstein. I have only been talking to you for 20 years or so, right?

    Sorry, Norm.

  • NORMAN ORNSTEIN, American Enterprise Institute:

    It's OK, Mr. "Broon."



    OK. Thank you.

    So, how do you — this is all about Boehner and to his right.






    And even with this package, he's moving to the right. At one level, you could look at this and be puzzled. We know these are endgames. Stakes are high. You go right to the very end. But, usually, when you have these moves made, you can kind of figure out what the chess move is and what's it's about.

    You can interpret this move by Boehner to step back from negotiations, where it looked like he and the president were only a couple of hundred billion dollars apart on a $2 trillion package, and abandon them for now to go with this as a move of desperation, knowing that any package that he worked out would fail in — among his Republicans in the House.

    Or you could look at it as a clever move where he wants to get them to vote for some tax increase and rate increase, and then they're a little bit pregnant. And then the next time, when you bring back the deal, you can say, we're not going to raise the rates to 39.6 percent. It's only 38 percent. It won't be a million. It will be a half-a-million, and maybe get something done. But it's a dangerous move.

    And while Christina is right that there's time left, there's no time left to get a comprehensive package. There's only time to get the rudiments of a deal right at the end of the year and then punt for a few weeks. And even there, when we see that he has to move further to the right to even get the votes to make this happen, it shows how dicey all of this is in the House.


    You're saying it could be this or it could be that. But you're not sure, right?


    I haven't seen a move like this before. Usually, you have histrionic statements, and they're not negotiating, we're walking away, and then they come back and make it work.

    This one, where he basically drops the negotiations at a critical point to move to a vote that isn't going to go anywhere in the Senate, that is only symbolic, is a puzzle.


    Because it is important to remember, as Norm just said, that a lot is not in this plan B, right?




    A lot of the big stuff is pushed to the side.


    Yes, and a lot of — the big issues that a lot of these Republicans on the conservative side are against in this bill, that it doesn't address entitlement spending, some of those major cuts that they're looking to see. They are saying it doesn't go far enough, and it raises taxes, to boot.

    So — and you're seeing a split among conservative groups, too.

    Today, you had FreedomWorks come out in favor of this — against this bill, the Family Research Council against raising taxes here. The Club for Growth is actually scoring this vote. So they could campaign against these Republicans that vote for this today.

    But, on the other side of that, Grover Norquist's Americans for Tax Reform, which obviously writes the taxpayer protection pledge, is for it. The Chamber of Commerce is for it. So it's split Republicans very much in two camps. And that puts a lot of pressure on Speaker Boehner.


    In the meantime, the president and the Democrats, what, wait?


    Well, they wait.

    There's another risk in all of this, which is that you have got liberal Democrats growing increasingly antsy, believing that President Obama has already moved too far for them, bringing Social Security into the mix, which they had been told wouldn't be brought in.

    And if, as Jay Carney said, he's ready to move a little bit more, they're saying, you have got the upper hand here.

    They're divided. The American people believe that it's the Republicans who are the obstructionists. If we do over go over the cliff on January 1, all those taxes go up, and then you can negotiate from there.

    So it's a little tricky for him to move even a little bit more to make this deal before the end of the year as well. And we're going to see if the Senate responds in any way to this, other than simply rejecting the Boehner plan, if it passes.


    What are you seeing?


    A lot of the Democrats, though, we're talking to are looking very closely at polls that are coming out show that the American people generally feel that, if we do go over the fiscal cliff's edge or if there is some sort of big crash in the stock market based on all this uncertainty, that the Republicans will take the blame for that.

    But, again, we keep coming back to this word dangerous. It's risky politically in lots of different ways. And the Democrats are just sort of waiting to say, well, let's see what Republicans do to one another tonight.


    Well, what are you hearing about any potential next meetings? We have the holiday coming, right?


    Yes. Well, the president is planning to go to Hawaii with his family. His family is going to be heading there soon.

    And he isn't getting on a plane any time soon. He could stay all through the weekend. It's possible he could wait all the way through Monday. And Eric Cantor threatened that today. He said we might stay here all weekend. Now, the Senate very much was just intending to come back next Thursday and deal with it then.


    Brief last word?



    And the critical point here is, will John Boehner be willing at some point to bring up a bill in the House that's a compromise that may require more Democratic votes than Republican votes? That is anathema to him, but it may be the only way out of this mess.


    Norm Ornstein, Christina Bellantoni, thanks so much.