House Speaker John Boehner and other House Republican leaders held a press conference this morning to announce that the fiscal cliff talks have essentially gone nowhere. With tax hikes on all Americans looming on January 1, Boehner announced that it is now time for “Plan B.” The House will now move its own bill that will allow tax rates to rise on those earning more than $1 million per year, while preserving current rates for everyone earning below that level.
Boehner will make the argument to House Republicans that tax rates will go up on everyone come Jan. 1. “The question for us is real simple: How do we stop as many of those rate hikes as possible?” Boehner plans to tell House Republicans.
“For weeks, Senate Republicans — and a growing number of you — have been pushing for us to pivot to a ‘Plan B,’” he will say. “I think there’s a better way. But 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 Jan. 1. They’re baked into current law. And we have to stop whatever tax rate increases we can. In the absence of an alternative, as of this morning, a ‘modified Plan B’ is the plan.”
The GOP bill does not deal with cutting spending or reforming entitlements. Negotiations with the Obama White House continue, but so far the Democrats have shown no interest in entitlement reform despite the fact that entitlement spending is driving the nation’s debt crisis.
During the press conference. Rep. Kevin McCarthy of California noted that while government revenues are up in the new fiscal year, government spending is also up. Revenues have increased 10% but spending has increased 16% and we have already piled up $290 billion in new debt since the fiscal year began on October 1. Obama’s latest offer only calls for $850 billion in total spending cuts spread out over a decade.