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October 21, 2014

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politics:

Boehner pitches Republicans tax options to avoid ‘fiscal cliff’

John Boehner

John Boehner

Harry Reid

Harry Reid

There is no fiscal cliff deal yet, Speaker John Boehner told House Republicans on Tuesday morning, but there are options.

Boehner said Republican leaders will start counting votes on up to three potential arrangements to avoid the fiscal cliff, each pegged at a different income level above which income tax rates would be allowed to rise.

“The one thing that they said over and over are that taxes are going up on January 1st. The question is, are they going up on everybody or are they going up on somebody,” said Nevada Rep. Mark Amodei, who was part of the briefing Tuesday morning.

“The speaker’s play is we want to try to minimize that exposure,” Amodei said. “But there’s not a lot of detail. So it’s like, we’re going to whip you, and we’re like, on what?”

Amodei said Boehner presented Republicans with three thresholds at which an extension of the Bush tax cuts could be capped: $250,000, $1 million, and something in between — likely the $400,000 level that emerged in reports from the White House yesterday.

The $400,000 proposal, which President Barack Obama suggested to Boehner in talks Monday, would limit tax hikes to the top income bracket, set to rise at year’s end from 35 percent to 39.5 percent.

The plan would not include an extension of payroll tax cuts. Taxes that fund Social Security would rise from 4.2 percent to 6.2 percent.

It would also include a new calculation for Social Security benefits to slow the inflation rate of the program, slowing the growth of payments over time.

That could pose a problem for some Democrats, including Sen. Harry Reid, who have said they will not support any plan to balance the budget on the back of Social Security.

Reid has not been a part of the final negotiations between Obama and Boehner, which for the last two weeks have been taking place in the White House and over the phone. Spokespeople for Boehner’s office and the White House said they are in regular contact about the negotiations.

A spokesperson for Reid responded to a question about where Reid stood on proposed changes to Social Security by saying: “He needs to talk to his caucus first.”

Generally, trade-offs appear to be the sticking point.

The president and speaker have discussed everything from an extension of the president’s authority to raise the debt ceiling, which Obama wants, to raising the age of eligibility for Medicare, which Obama is loath to do.

Boehner offered to dispense with talk about raising the Medicare eligibility age if Congress adopts his “Plan B” proposal: Keeping tax rates fixed for everyone earning up to $1 million.

Last year, prior to the debt ceiling, the Senate considered a similar proposal — at least in terms of the million-dollar tax rate threshold — proposed by Democratic Sen. Chuck Schumer. It didn’t pass, and Reid says this proposal won’t, either.

“Speaker Boehner’s ‘plan B’ is the farthest thing from a balanced approach. It will not protect middle class families because it cannot pass both Houses of Congress,” Reid said. “The Senate bill is the only ‘plan B’ that can be signed into law and prevent taxes from rising by $2,200 on the average middle-class family.”

The Senate bill to which Reid referred would extend the Bush tax rates up to income levels of $250,000. It passed the Senate last summer by a simple majority vote with no Republican support. It is now sitting before the House, where it will be hard-pressed to get Republican support.

But the plan is to use that bill as a foundation for Boehner to present the two non-$250,000 scenarios as amendments. Those votes may happen as soon as late this week, Amodei said.

The White House also rejected Boehner's approach.

“[The president] is not willing to accept a deal that doesn’t ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors,” said White House spokesman Jay Carney, who added that “the parameters of a deal are clear.”

“The Speaker’s “Plan B” approach doesn’t meet this test because it can’t pass the Senate and, therefore, will not protect middle-class families,” Carney said.

The Associated Press contributed to this report.

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