Boehner Pulls Back On Tax-Rate Openness

National Journal

Speaker John Boehner is reaffirming that he will not back down from his opposition to a tax-rate hike for any Americans, after seeming to suggest on Friday he might, in fact, be open to a fiscal cliff compromise that could allow the income tax rate on the wealthiest to rise next year, though not as high as currently scheduled.

“There are a lot of things that are possible … to put revenue that the president seeks on the table,” Boehner had responded on Friday when asked at a news conference if such a compromise was in the works. But he warned, “None of it’s going to be possible if the president insists on his positions—insists on ‘my way or the highway.’ ”

But the speaker’s office has since distributed a follow-up statement that Boehner remains firmly opposed to any tax-rate hikes. “As I’ve said many, many, many times: I oppose tax rate increases because tax rate increases cost American jobs. That has not changed, and will not change,” said the statement from Boehner.

The episode represents yet the latest indication of a two-front, almost bipolar battle the Ohio Republican appears to be waging in fiscal negotiations with Democrats. In trying to strike a deal with them, he must also consider the response of conservatives within his own Republican conference and outside of Congress, who might rebel if he caves in on his promises not to agree to higher taxes.

Boehner’s remarks at the Capitol news conference Friday came after he was asked whether he could agree to some “middle ground” on the scheduled year-end increase in the top rate, such as a 37 percent hike, rather than the 39.6 percent level it would reach if the rates lowered under former President George W. Bush are allowed to expire at year’s end.

In a separate news conference on Friday, Minority Leader Nancy Pelosi, D-Calif., also seemed to indicate there are discussions about such a middle-ground compromise. She said, “It’s not about the rate; it’s about the money." Pelosi said she did not know how much lower than the automatic 39.6 percent increase set to take effect on top earners lawmakers could drop the increase and still produce the needed revenue.

“No, I don’t know that,” she said.

The scheduled expiration of the tax cuts enacted under Bush is at the forefront of fiscal-cliff negotiations. Congressional Republicans want to extend all the cuts, putting them at logger-heads with the White House and Democrats who only want to keep lower rates on annual incomes of up to $250,000. The stalemate has prevented Congress from acting on any tax-rate freezes. While insisting the rate be raised on top earners, however, Obama has not been insisting that it be raised to the full 39.6 percent.

The talk on Friday of some middle ground seemed to at least indicate that negotiators are giving some thought to perhaps allowing a smaller increase on high-end earners or even carving out provisions for small businesses.

But at his press conference, Boehner said the “risk” the president is asking Republicans to take by going along with a spike in the rates for top earners is one that will harm many small businesses and job growth.

Boehner also took the opportunity to blast as “reckless” a Wednesday remark from Treasury Secretary Timothy Geithner that the White House would “absolutely” go over the fiscal cliff unless Republicans agree to let tax rates increase on the top 2 percent of wage earners.

“I think that’s reckless talk,” Boehner said, also declaring that the White House had “wasted” another week.

Boehner also noted news reports this week reiterating a Republican talking point that Democrats have adopted a deliberate “slow walk” position on the fiscal-cliff negotiations to get what they want. Instead, Boehner urged the White House to offer a plan that could pass both chambers.

For her part, Pelosi—who met Friday with Obamasaid that Democrats do want swift action on at least one fiscal cliff component—freezing the set tax hikes for the middle class.

View Comments (875)