The drama in Washington DC: John Boehner is pushing for the passage of ‘Plan B’, a fiscal cliff solution that would see taxes rise on those making over $1 million per year, while freezing lower taxes on everyone else.Obama has threatened to veto the bill.
Jackie Calmes and Jonathan Weisman have some very important details about the mechanics of the legislation:
- The package would only raise $300 billion in new revenue in 10 years vs. Boehner’s initial offer of $800 billion, and Obama’s proposal of $1 trillion if taxes rose on those making over $250K.
- The bill actually repeals some Clinton-era rules about limiting deductions if you make over $1 million, so it actually gives millionaires some breaks.
- There is no guarantee the bill will pass.
- It doesn’t directly address the sequester (the automatic spending cuts) so Boehner is also pushing a simultaneous bill that moves the military cuts to domestic cuts, so that hawks will come aboard.
Here’s the problem: This is not going to be a hard bill for Obama to veto. Yes, it keeps taxes low on folks making less than $1 million, but because it will still see deep spending cuts (but switched to domestic funding), because the revenue is so paltry, and because it doesn’t include any kind of unemployment extension, it’s easy for Obama to say this falls way short of tolerable.
Furthermore, it has the potential to really backfire for Boehner if A) It doesn’t pass and B) He’s now opened the Pandora’s Box of being open to tax hikes (for example, he’s now gotten Grover Norquist to sign off on them).
As for whether it does pass, Boehner can lose just 23 or 24 Republicans. One Congressional aide predicted he would lose 20. That aide also characterised the thinking of dissenters this way:
For conservatives to vote against it they have to have the mentality that if they were lifeguards and saw 10 people drowning, they would decide to stay on the beach because they thought they could only save 9 and don’t want to be responsible for the one that dies.
So the upside is minimal (Obama just says ‘no’ and that’s that) and the downside is considerable if Boehner’s hand ends up significantly weakened. Today will be interesting.