Daily Tax Update - December 18: White House Rejects Boehner's Fiscal Cliff "Plan B"

WHITE HOUSE REJECTS BOEHNER’S FISCAL CLIFF “PLAN B”:  The White House said today that President Obama "is not willing to accept" Speaker John Boehner’s "Plan B" to avoid the fiscal cliff.  Boehner announced today that the House would vote on legislation to extend tax rates on income below $1 million as a backup plan if his negotiations with President Obama do not succeed.  The White House rejected Boehner’s proposal, saying it "doesn’t ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors."  In a statement, White House Press Secretary Jay Carney said, “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.”  Carney added that the president is still working toward a final agreement that cuts future deficits by about $4 trillion over the next decade.  Carney said, “We are very close to being able to achieve that . . . and the president has demonstrated an obvious willingness to compromise and to move more than halfway towards the Republicans."

  • Boehner’s “Plan B” would not address the automatic spending cuts set to trigger at the end of the year, and would defer other issues including unemployment benefits to entitlement reform into the next Congress.  Boehner’s office said that Obama’s rejection of the plan “defies common sense.”  A Boehner spokesman said, “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.”
  • Majority Leader Harry Reid said the plan "cannot pass" and accused Boehner of attempting to "kick the can down the road."
  • Boehner still expressed optimism that an agreement can be reached stating, “I continue to have hope we can reach a broader agreement with the White House that will reduce spending and put revenues on the table.  I think it would be better for our country, but at this point having a backup plan to make sure as few American taxpayers are affected by this as possible and moving down that path is the right course of action for us."

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