Published December 20, 2012
House Speaker John Boehner declared Wednesday that his chamber will approve a so-called "Plan B" to avert a crush of tax hikes just 13 days away, despite President Obama and Senate Majority Leader Harry Reid vowing to oppose it.
The move came as talks between Boehner and Obama suddenly hit a standstill. Boehner's decision on Tuesday to put forward the "Plan B" -- which would raise taxes only on those making over $1 million, and preserve current rates for everyone else -- angered the White House. On Wednesday morning, the White House issued a formal veto threat, as the president urged Republicans during a press conference to "peel off the partisan war paint."
In response to the president's criticism and resistance, Boehner called a press conference -- which lasted less than one minute -- to declare the House was moving forward and put the onus on the president to get Democrats on board.
"Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American," Boehner said. "Then the president will have a decision to make. He can call on the Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history."
American workers, until recently, had been breathing a sigh of relief. Obama earlier this week backed off his long-held position that taxes should rise on households making over $250,000. At the same time, Boehner backed off his long-held opposition to any kind of tax rate hike, and the two sides were simply in search of a middle ground.
But the cordial and productive tone of the negotiations appears to have taken a turn for the worse.
Senior administration officials accuse Boehner of at least temporarily derailing fiscal talks with the "Plan B" move.
The administration officials said that while Obama is currently scheduled to leave as early as Friday for a family vacation over the holidays, he is now planning to stay in Washington for the foreseeable future. The officials said that while the lines of communication are open, there have been no conversations between the two men since Boehner's announcement Tuesday.
The officials complained Boehner's plan did nothing to avert automatic spending cuts that will result in a 9 percent budget cut at the Pentagon. The officials also noted Boehner's plan does not deal with expiring unemployment insurance, meaning that about 2 million people will lose benefits within two weeks of Christmas.
Republicans, though, said the White House was being unreasonable.
Boehner spokesman Brendan Buck said the "opposition to a back-up plan to ensure taxes don't rise on American families is growing more bizarre and irrational by the day."
Republican House leaders said it's important for Washington to have an alternative plan just in case Boehner and Obama cannot come to an agreement.
Complicating the situation are the growing demands and red lines of the Democratic and Republican bases.
Rank-and-file Democrats and liberal advocacy groups have grown increasingly vocal about a proposal that would reduce cost-of-living increases in Social Security. Obama recently agreed to put that on the table.
"The less money our Social Security recipients -- including 9 million veterans -- are able to spend, the less money goes to the businesses that create jobs," Rep. Raul Grijalva, D-Ariz. "It's a Beltway fig leaf that I will never support, and I call on my colleagues to make their feelings known as soon as possible."
Conservatives, though, were equally dismayed that Boehner had dropped his absolute opposition to tax rate increases. Even for the Plan B, one Republican member told Fox News "there's a lot of angst there" -- though Republican House Leader Eric Cantor claims there are enough votes to pass it.
Any deal that increases taxes above a certain income threshold, such as $1 million, would only apply to income over that threshold.
Despite the drama, a senior administration official said they believe both parties are still extremely close on a massive $4 trillion debt deal if both sides give in a little more.
Obama said Wednesday that "I'd like to get it done before Christmas" and that he remains "optimistic."
But both sides appeared to once again be digging in. Obama said Wednesday he's met Boehner "at least half-way," and again refused to agree to a deal that tees up a fight over the debt ceiling early next year.
Some conservatives were hoping to strike a tax agreement before the end of the year, yet renew their campaign for spending cuts as part of the debt-ceiling debate.
Fox News' Ed Henry contributed to this report.