BRILLIANT or BONEHEADED MOVE? BOEHNER'S PLAN B COMPROMISE

House Majority Leader Eric Cantor said unequivocally Thursday that Speaker John Boehner’s fiscal cliff fallback plan would pass the lower chamber later in the day.

The House of Representatives will vote today on two measures to shield families and small businesses from the looming “fiscal cliff” by cutting spending and protecting millions from tax hikes.

These bills are:

• The Spending Reduction Act of 2012 (H.R. 6684) replaces the president’s defense ‘sequester’ with common-sense spending cuts and reforms, and reduces the deficit by approximately $200 billion more than the original sequester. The bill focuses on stopping waste, fraud, and abuse in federal programs, eliminating government slush funds (including an ObamaCare slush fund), and reducing waste and duplication in government bureaucracies. The House passed this bill in May but Senate Democrats never took action. Learn more about it here.
• The Permanent Tax Relief for Families and Small Businesses Act of 2012 (H.J. Res. 66) permanently protects millions of taxpayers from President Obama’s tax rate hikes. The bill permanently extends current tax rates for everyone making less than $1 million, the $1,000 child tax credit, expensing relief for small businesses, and much more. Analysis by the nonpartisan JCT found it is a $3.9 trillion tax cut. As Speaker John Boehner said yesterday, the president can “call on Senate Democrats to pass [this] bill, or he can be responsible for the largest tax increase in American history.”  Learn more about it here.

While the White House slow-walks us all to the edge of the fiscal cliff, Republicans are once again taking action to protect American families, our economy, and our national security.

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The White House rejected Plan B proposed by John Boehner, House Speaker, to extend the Bush tax cuts, saying it doesn't go far enough.

Boehner told fellow Republicans that they should consider his Plan B on how to avert automatic tax increases and spending cuts.

The option would be for the House to pass a plan letting top tax rates increase on income over $1 million only and send that bill, along with a bill extending the current tax rates enacted under former President George W. Bush for everyone, and leave it up to the Senate to decide.

Boehner said the bill could come to a vote as early as Thursday.

Boehner told GOP members at a meeting on Tuesday, “For weeks, Senate Republicans and a growing number of you have been pushing for us to pivot to a 'Plan B.' I think there's a better way. The White House just can't seem to bring itself to agree to a 'balanced' approach, and time is running short. Taxes are going up on everyone on January 1.  They're baked into current law. And we have to stop whatever tax rate increases we can.”

“Instead of letting tax rates rise on Americans making $250,000 or more, the rates would rise only on those making a million and up, " Boehner stated. "Instead of getting zero spending cuts, we’d get a trillion in spending cuts, mostly from entitlement programs. Most importantly, we’d lock in a process for tax reform and entitlement reform in 2013, the two big goals we’ve talked about for years."

However, this marks the first time Boehner is asking Republicans to vote for a tax increase. Several members of the GOP opposed to tax hikes said they would at least consider Boehner’s proposal, others rejected it outright.

Economists have cautioned that without action by Congress the severe combination of extreme tax increases and spending cuts could push the economy into a recession.

But this is exactly what both sides are proposing in their respective "solutions," raising taxes and cutting spending, albeit in a more controlled way.

The proposal shows a GOP willingness to compromise, whether you agree with it or not. It also places the ball firmly on Obama's side of the court to show a meaningful response, which, if today's White House comments are any indicator, reveal the Democrats are the ones hampering progress on the nation's woes.

OBAMA WANTS THE U.S. TO FALL OVER FISCAL CLIFF

'Brilliant or boneheaded move?' only time will tell. And time is running short for all of us.

The bill would allow tax rates on annual income above $1 million to rise from 35 percent to 39.6 percent, but make permanent lower rates on income below that threshold. The plan also increase both the capital gains and the top dividends tax rate to 20 percent from 15 and does not increase the debt ceiling.

Boehner revealed the plan in conference meeting. Several differences remain to be hammered out concerning spending cuts, entitlement reforms, and new spending measures demanded by Obama coupled with his for a hike to the debt limit.

Details were lacking on what the House would do to prevent sequester, which is the scheduled billions of dollars of cuts to defense and domestic programs. The chamber may seek to push those cuts into next year and freeze some of the other programs into the new year.

Boehner said, "Our hope continues to be to reach an agreement with the president on a ‘balanced’ approach that averts the fiscal cliff. What we’ve offered meets the definition of balance, but the president is not there yet. The White House offer yesterday was essentially $1.3 trillion in new revenues for only $850 billion in net spending reductions. That’s not balanced in my opinion.

“So at the same time that we’re going to continue to talk with the president, we’re going to also move Plan B. I think we all know that every income tax filer in America is going to pay higher rates come January 1 unless Congress acts. So I believe it’s important that we protect as many American taxpayers as we can. Our Plan B would protect American taxpayers who make $1 million or less, and have all of their current rates extended.

“I continue to have hope that we can reach a broader agreement with the White House that would reduce spending as well as have revenues on the table. I think it’d be better for our country. But at this point, having a backup plan that makes sure that as few American taxpayers are affected by this increase as possible – moving down that path is the right course of action for us.”

Jay Carney, White House spokesman, said Obama was “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. 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 is hopeful that both sides can work out remaining differences and reach a solution so we don’t miss the opportunity in front of us today.”

Democratic leaders plan to rally their members against Boehner's plan, forcing Republicans to come up with the votes to pass it on their own.

Obama on Monday offered to raise income tax rates on annual income above $400,000. This was a shift from his position that income tax rates should rise on annual income above $250,000. He has also proposed changing the way cost-of-living increases are calculated for benefits in entitlement programs, curtailing the Consumer Price Index it is estimated would raise $130 billion over 10 years.

However, Boehner stopped short of predicting that a deal with the president was likely. He also confirmed that his definition of balanced meant an equal amount of spending cuts and new tax revenue: $1 trillion in cuts and $1 trillion in revenue, saying, “Most people would agree that that’s balanced.”