As the nation creeps another day closer to falling off the fiscal cliff, House Republicans are working on a Plan B, as negotiations on an agreement have progressed but have yielded no deal
On Thursday, the House will consider two tax amendments. FOX Business has learned the details exclusively.
The Republican-favored plan permanently extends tax rates on annual incomes of less than $1 million. It also maintains the top 15% tax rate on capital gains and dividends for those taxpayers, and raises the top investment rates to 20% on amounts of more than $1 million. The Republican proposal also permanently exempts tens of millions of middle-class taxpayers from the Alternative Minimum Tax, and sets the estate tax at 35% with a $5 million exemption.
The second proposal, which Republicans wrote based off of House Minority Leader Nancy Pelosi’s positions and has thus been dubbed “the Pelosi Plan,” extends current tax rates on annual income amounts of less than $250,000. It also extends a series of expanded refundable tax credits and sets Estate Tax levels at 55% percent on amounts of more than $1 million.
Neither amendment addresses the hundreds of billions of dollars in automatic spending cuts known as the sequester, an increase in the debt ceiling, a scheduled payment cut for doctors treating Medicare patients or the expiring payroll tax cut.
If the bill clears the House, senators would have the chance to consider and change it. If the Democrat-controlled Senate alters the House bill, the House would have to consider it again.
If lawmakers fail to come to an agreement on spending cuts and tax increases to repair the ballooning national deficit by the end of the year, automatic tax hikes are set to go into effect on Jan. 1.
There were new signs of optimism that Boehner and Obama were drawing closer to a debt deal featuring higher taxes and lower spending, after a handful of phone calls and meetings over the week. Still, conservatives have expressed opposition to higher tax rates and a possible increase in the debt ceiling, without greater spending concessions from Democrats than the president and speaker are discussing.
In response to Boehner's Plan B, the White House said the president is hopeful a deal can still be reached, but that this new plan isn't enough. "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, and does little to address our fiscal challenges with zero spending cuts," Press Secretary Jay Carney said in a statement.
This response didn't sit well with the speaker's office. "The White House’s position defies common sense. After spending months saying we must ask for more from millionaires and billionaires, how can they reject a plan that does exactly that? By once again moving the goal posts, the President is threatening every American family with higher taxes.” said Boehner's spokesman in a statement.
Rich Edson joined the FOX Business Network as a Washington correspondent in October 2007.