Defying a White House veto threat, House Republicans on Thursday are pressing forward with a vote on a bill to raise taxes on Americans earning more than $1 million a year, in a bid to increase pressure on President Barack Obama in fiscal-cliff negotiations.
The bill would be a dead letter in the Democratic-controlled Senate, Majority Leader Harry Reid has made clear. The White House on Wednesday said Obama would veto the bill and the president urged Republicans to “take the deal” he has presented to them. House Republican leaders publicly remain adamant about extracting more concessions from Obama, even as the two sides’ positions have crept closer after a flurry of counterproposals.
A vote on the tax bill, dubbed “Plan B,” is expected Thursday evening.
In a brief statement on Wednesday, House Speaker John Boehner said the House would pass Plan B and that it was up to Obama to see it enacted.
“He can call on Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in history,” Boehner said.
Boehner is pressing ahead with the bill as a fallback plan in case fiscal-cliff negotiations with Obama fail. The two men have not spoken since Monday, and Boehner announced his Plan B on Tuesday. Some conservatives, including Rep. Tim Huelskamp, a Kansas Republican, are uncomfortable with Boehner’s Plan B. To attract conservatives upset about tax increases, Republican leaders added a vote on a second measure that would replace automatic cuts to the military with other cuts.
Boehner’s office says that Plan B would represent a $3.9 trillion tax cut.
The White House’s threat to veto Plan B roiled U.S. equity markets on Wednesday. Stocks posted small losses on Thursday morning.
While negotiations have stalled between Obama and Boehner, some analysts believe a deal of some kind will be concluded before the end of the year.
“The likelihood of going past year-end without any resolution of the fiscal cliff has not increased, in our view,” wrote Alec Phillips of Goldman Sachs on Thursday.
He said that view is based partly on progress made in talks to date between Obama and Boehner and also since it has become “increasingly possible” that a fallback plan could be passed to avert some of the fiscal cliff.
Besides extending Bush-era tax rates for most Americans, Plan B also keeps current rules on the estate tax; maintains the 15% tax rate on capital gains and dividends for those making less than $1 million; and extends some expensing for small businesses, among other measures. Read more about Plan B on Political Watch blog.