A "Plan B" offered by Speaker John Boehner that would avert year-end tax hikes for all Americans who make less than $1 million was on one level a warning to the White House to bend more in the fiscal-cliff negotiations. But it was also a message to panicky House conservatives aimed at reassuring them that they have an emergency exit from their political quandary, should they choose to use it.
There was choreography to it all--floating such a backup strategy to members in which Boehner says he will continue his negotiations with President Obama, but offering that the House can choose to pass its own plan letting top tax rates increase on annual incomes over $1 million. The House would then send it over to the Senate--and go home for the year.
So choreographed was Boehner’s announcement behind closed doors that some House Republicans were actually provided an early glimpse of this strategy late last week, in briefings that involved officials of the Republican National Committee. But a Boehner spokesman said Wednesday that while various hypothetical approaches may have been discussed last week, no final decision to go ahead with this exact strategy was made until after the weekend. The move reflects a mentality being pushed by some conservatives--including former Speaker Newt Gingrich of Georgia--that Republicans need more time to regain their balance and think through strategies in the wake of their election shellacking.
Certainly, one of the aims of offering a Plan B--as Boehner claimed--is to goose the White House into agreeing to what Republicans maintain is a more “balanced” approach on dealing with the fiscal-cliff combo of expiring lower tax rates enacted under former President George W. Bush and automatic spending cuts.
Not unexpectedly, White House spokesman Jay Carney quickly panned the notion of letting only tax rates on earners of $1 million or more annually expire, declaring in a statement that such a plan “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.”
But a second aim of Boehner’s Plan B strategy is clearly directed internally—at grousing House Republicans. He is telling members of his conference who are restive that he will cave more significantly on taxes now that it is as much on their shoulders as his--because they can cut bait on his negotiations or wait them out. He’s not going to take all the heat for any eventual deal they don’t like.
One senior House Republican aide said that some members have been saying they've had it with the private negotiations between Boehner and the White House, including some who believe these talks should be held in an open conference.
What Boehner is now offering, the Republican aide said, is, “We can do something else, if you want.”
Boehner did emphasize that ongoing talks with the president will carry on. And he said he continued “to have hope we can reach a broader agreement with the White House,” although dissing the latest offer from the administration on Monday as one that essentially brings $1.3 trillion in new revenues for only $850 billion in net spending reductions. “That is not balanced in my opinion.”
But Boehner said that the GOP goal, and what could be achieved with Plan B, was to “protect as many American taxpayers as we can.” Obama on Monday had offered a new position on its tax-rate threshold to $400,000, but it is not certain whether Boehner and Republicans might consider adjusting downward the threshold on any bill they may bring to the floor.
Boehner also said that a patch for the expiring alternative minimum tax and the “death tax could likely be part of the bill that we would bring to the floor.” As for the so-called mandatory sequester spending cuts set to kick in on Jan. 2, Boehner said this would not deal with those as he continues negotiating for a broader agreement.
Some Republicans said their understanding was that a Plan B tax bill would be brought to the House floor on Thursday, but that does not appear to be set in stone. Boehner, asked if he had support for Plan B in his conference, waved the question away and walked on. House Republicans will meet again at 5 p.m. on Tuesday.
And early reaction from members appeared to be mixed. Some indicated displeasure with even allowing just tax rates on incomes over $1 million to go up. Another point of contention in the closed-door meeting was how to ensure spending cuts are included in any kind of deal to avert the cliff, said Rep. Steve Womack, R-Ark., who is also a member of the GOP whip team.
"If I heard one common theme, it was the lack of clarity on spending," he said.
Some conservative House Republicans said that once Republicans publicly concede to supporting a tax increase, he fears Republicans will have lost the moral high ground on the issue. In their view, the ultimate negotiated cut-off number will become irrelevant at that point, because Republicans will have conceded on the philosophical issue to the White House, and they will have become a party that supports tax increases.
“Once you cross that line and say it's OK for some people’s taxes to go up, I think it’s a mistake for the Republican Party, so I think that’s what a lot of members are struggling with,” said Rep. Jim Jordan, R-Ohio.
But Rep. Jo Bonner, R-Ala., said “there is not a Republican who got elected to this conference or to the next one that ran to vote to raise taxes. So what we are looking at is how do we keep taxes as low as possible for as many people as possible?” Bonner added that Boehner is “just putting out the different options, bringing the conference into the conversations he’s had with the president, and giving us the reality of the choices that we have.”
Others even expressed optimism that Boehner’s Plan B is a good negotiating strategy versus the White House. “I think it moves us closer to an arrangement, a deal. I think this is very much between the president and the speaker at this point; there are still a lot of spending cuts and entitlement reforms on the table, and we all want as many of those as we can possibly get,” said Rep. Tom Cole, R-Okla.
But as for where things are really headed? “I don’t think anyone knows,” said Bonner.
CORRECTION: An earlier version of this article misstated Rep. Steve Womack's home state. He is from Arkansas.
Michael Catalini, Niraj Chokshi, Shane Goldmacher, Stacy Kaper, Rebecca Kaplan, Elahe Izadi, and Ben Terris contributed