Boehner outlines ‘fiscal cliff’ ‘Plan B’—which White House promptly rejects

With less than two weeks to prevent automatic tax hikes and spending cuts, Republican House Speaker John Boehner pressed ahead on Tuesday with an alternative to "fiscal cliff" negotiations with the White House—a bill that would raise taxes on income over $1 million.

But nearly as soon as Boehner had announced his deal to the public in a press conference, the White House rejected the offer, saying it fails to meet the criteria of ending tax breaks for the top 2 percent, and forces the middle class, seniors and other vulnerable groups to shoulder the country's financial burden.

The president "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," White House press secretary Jay Carney said in a statement. "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."

The president had been holding firm on ending tax breaks for households earning over $250,000 but on Monday offered to raise that threshold to households earning over $400,000.

Following the White House's rejection of the plan, Brendan Buck, Boehner's spokesman, said, "The White House's position defies common sense. After spending months saying we must ask for more from millionaires and billionaires, how can they reject a plan that does exactly that? By once again moving the goal posts, the president is threatening every American family with higher taxes."

Republicans have been staunchly opposed to raising taxes on any Americans. But Boehner's "Plan B" included tax raises for Americans earning over $1 million. His plan also includes $1 trillion in spending cuts over 10 years.

"I believe it's important we protect as many American taxpayers as we can," Boehner said at his Capitol Hill press conference earlier on Tuesday. "Our Plan B would protect American taxpayers who make $1 million or less, and have all of their current rates extended."
Before Boehner announced his plan to the public, a source familiar with it who requested anonymity emphasized that the speaker was not backing out of negotiations with Obama, who laid out his latest offer on Monday for avoiding the so-called fiscal cliff. Experts have warned that going off the cliff could plunge the fragile economy into a new recession.

"The speaker will continue to work with the president on a broader agreement as he told the president last night in a phone call, but with time running short the House will act as a precautionary measure to ensure taxes don't rise for most Americans on Jan. 1," the source said.

Any kind of tax hike could be hard to sell to House Republicans. "I'm a don't-raise-any-taxes kind of girl," Republican Rep. Marsha Blackburn said as she walked into Tuesday's meeting.

Boehner planned to argue to his fractious rank-and-file that a stalemate with the White House would be far worse. Under current law, failure to act will trigger across-the-board income tax hikes as well as deep cuts to defense spending.

"The question for us is real simple: How do we stop as many of those rate hikes as possible?" Boehner planned to tell House Republicans. "In the absence of an alternative, as of this morning, a 'modified Plan B' is the plan."

Boehner also said he would emphasize that "we're leaving the door wide open for something better. Plan B is Plan B for a reason. It's a less-than-ideal outcome. I've always believed we can do better."

Boehner also hoped to "lock in" plans to overhaul the tax code and cut entitlement spending in 2013.

But after the White House rejection and with no sign that the Democrat-held Senate would sign on to his Plan B, Boehner's move appeared to be a largely cosmetic effort to make a final compromise easier to swallow for House Republicans.

Rachel Rose Hartman contributed to this report.

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