Boehner to push Budget Bill while continuing talks

US President cuts his tax revenue demand by $200 bn to resolve financial crisis

US House Speaker John Boehner said he will push a Budget “plan B” measure that will include tax increases on income of more than $1 million a year, while he continues to negotiate with President Barack Obama.

“It’s important that we protect as many American taxpayers as we can,” Boehner said in Washington on Tuesday. “Our Plan B would protect American taxpayers who make $1 million or less.”

Boehner said he still hopes to reach a broader Budget deal with the president. The speaker said he expects the legislation to be on the House floor by the end of the week, and that it may include other measures such as the estate tax and curbing the expansion of the alternative-minimum tax.

DEAL IN SIGHT?
President Obama presented a new offer to House speaker John Boehner on Monday to resolve the pending fiscal crisis. The offer is close to a plan proposed by Boehner on Friday

$1.2 trn
Revenues that could be raised over the next decade 

$1 trn
would be raised over 10 years, according to a deficit framework Boehner had offered the president 

$1.6 trn
Obama's initial offer, which he further reduced to $1.4 trillion and then $1.2 trillion on Monday 

* White House plan would permanently extend Bush-era tax cuts on household incomes below $400,000. Obama had earlier proposed cuts on household incomes below $250,000

CUTS CONUNDRUM

* The White House says the president’s plan would cut spending by $1.22 trillion over 10 years. They would come from:

$800 bn in savings from cuts in schemes like federal health care programmes, farm price supports, military spending, domestic programmes

$122 bn will come from adopting a new measure of inflation that slows the growth of government benefits

$290 bn Savings from lower interest costs on a reduced national debt

 

Yesterday, Obama lowered his tax revenue demand by $200 billion and offered to start tax rate increases at $400,000 in income instead of $250,000. His revised plan would raise $1.2 trillion in taxes in the next decade and cut $1.22 trillion in spending, said a person familiar with the talks.

Referring to Boehner’s current plan, White House Spokesman Jay Carney said it isn’t balanced and can’t pass the Democratic-controlled Senate. “The president is hopeful that both sides can work out remaining differences and reach a solution,” Carney said.

Fewer than two weeks remain to avert more than $600 billion in automatic spending cuts and tax increases, known as the fiscal cliff, set to start in January. Boehner’s decision to set up a second legislative track complicates the situation, which had been focused on the intensifying talks between the speaker and the president.

Now, there are at least three possible paths forward: a bipartisan deal between Boehner and Obama, a House tax-cut bill that leaves unresolved how to handle raising the federal debt limit, and no action — allowing the spending cuts and tax increases to start in January. The Congressional Budget Office has said a failure to avert the changes would probably lead to a recession in the first half of 2013.

Boehner said the plan to be voted on this week won’t reverse automatic spending cuts set to take effect in January. Brendan Buck, his spokesman, , said that by rejecting Boehner’s latest plan, the White House “is threatening every American family with higher taxes.”

Boehner spoke to reporters after he and House Majority Leader Eric Cantor briefed House Republicans privately on the negotiations. Afterward, some Republicans expressed concern about backing off the party’s prior insistence on not raising tax rates for any income level.

Democrats rejected Boehner’s plan out of hand. House Minority Leader Nancy Pelosi, a California Democrat, said, “I think Democrats would be unified in rejecting Boehner’s plan.”