In a procedural vote Thursday afternoon, the U.S. House voted to allow consideration of the budget plan known as "Plan B" and put forward by Speaker John Boehner (R-Ohio) as a way to avert the dreaded fiscal cliff. The final vote is expected to take place later Thursday evening.
The vote was 219-197, with 13 Republicans voting against the measure. If passed later Thursday night, the bill would allow taxes to increase on those earning $1 million or more annually and a second bill would avoid the deep cuts in defense that will occur if the sequester takes place.
However, even if the bill passes the House, it is doubtful it will be passed into law since if would have to pass a Senate controlled by Democrats and then signed by President Obama, who has firmly stated he would veto the bill. more >>
In a Wednesday press conference, President Barack Obama again rejected Speaker of the House John Boehner's "plan B" proposal to increase taxes on millionaires while preserving tax cuts for everyone else. He also accused Republicans of being unwilling to compromise because they will not support his plan.
"Remember what I said in the campaign," Obama remarked in response to a question about the "fiscal cliff." "I thought that it was important for us to reduce our deficit in a balanced and responsible way. I said it was important for us to make sure that millionaires and billionaires pay their fair share."
Boehner's plan to increase taxes on taxable income above $1 million and preserve tax cuts for everyone else did not meet the goal of balance and making sure that "millionaires and billionaires pay their fair share," Obama said, because it would give tax breaks to those making more than $250,000 and less than $1 million. more >>
Speaker of the House John Boehner (R-Ohio) proposed a "plan B" to avoid the "fiscal cliff" in the event that negotiations with President Barack Obama fall through. Plan B would increase taxes on taxable income above $1 million while preventing taxes from going up below that amount. While the Republican plan seeks to protect the middle class from tax increases, Democrats said the plan will not work because they will not vote for it.
While Senate Democrats have threatened to not pass the measure, if it is the only bill that the House passes, those Democrats would be put in the position of either passing a bill that increases taxes only on millionaires or letting taxes go up on everyone. Boehner calculates that it would be difficult to maintain that position after an election season in which Democrats repeatedly accused Republicans of wanting to give tax breaks to "millionaires and billionaires."
White House spokesperson Jay Carney released a statement Tuesday rejecting Boehner's plan B. The plan would not protect the middle class, Carney explained, because Democrats would not vote for it. more >>
To avoid the "fiscal cliff," Republicans have recently offered more compromises on tax rates and the debt limit. They are asking for entitlement reform in return, but Democrats seem unwilling to budge on the spending side of the Treasury's ledger.
Speaker of the House John Boehner met with President Barack Obama and offered to increase the tax rate on taxable income above $1 million and to increase the debt limit enough that it would not need another increase for one year. According to unnamed sources in the White House, the offer was rejected, but they acknowledged it was a significant step in their direction on behalf of the speaker.
The private meeting between Boehner and Obama was on Friday and news of what was discussed continued to leak over the weekend. They met again on Monday, beginning at 11:30 a.m. more >>
Pew provided respondents with 12 deficit reduction options and asked if they approved or disapproved of each option. Majorities approved of five of the options: raise taxes on income over $250,000 (69 percent), limit deductions a taxpayer can claim (54 percent), raise the tax rate on investment income (52 percent), reduce Medicare benefits for higher income seniors (51 percent), and reduce Social Security benefits for higher income seniors (51 percent).
Deficit reduction solutions that impact a broader range of Americans received less support. The options that majorities disapproved included: reduce military spending (55 percent), gradually raise Social Security retirement age (56 percent), gradually raise Medicare retirement age (56 percent), and limit the home mortgage deduction (52 percent). more >>
With the deadline to avert the "fiscal cliff" quickly approaching, it may be helpful to recall how we reached this point. Here is a timeline, or "fiscal cliff notes," of events that led to the current predicament.
1917: Congress first put a limit on the amount and types of debt the Treasury Department was allowed to issue. It was initially intended to give the Treasury more flexibility, not less, to manage the nation's finances. Eventually, members of Congress realized they could use it to force tough choices in the federal budget.
1935: The Social Security program is implemented. It is a social insurance program for retirees over age 65 (later increased to 67). Implemented as a "pay-as-you-go" system, current workers pay the taxes for current retirees. When it was first implemented, few workers lived to age 65 and fewer still lived long past 65. Over time, however, as health care improved, more people lived to age 65 and collected Social Security for a longer period after age 65. Add to that the retirements of the Baby Boom generation, and the cost of Social Security is expected to rise dramatically over the next decade. more >>