Will GOP's 'Plan B' push Obama closer to 'fiscal cliff' deal?

With less than a week to go before Christmas, talks between President Obama and House Speaker John Boehner (R) of Ohio show no public signs of progress as the House moves toward its own response to the so-called “fiscal cliff” on Thursday evening.

Part 1 of that response is a bill known called “Plan B” by Speaker Boehner, a measure that would permanently extend income tax rates for American households making under $1 million per year, alongside permanent fixes for capital gains, dividends, the estate tax, and the Alternative Minimum Tax (AMT), among other measures.

That’s been coupled with another vote on a fix for the budget-cutting sequester that's been salted with other Republican priorities, including repealing parts of Mr. Obama's signature health-care law and financial regulatory reform scheme. The House passed the measure that would replace the sequester, some $109 billion in automatic spending reductions scheduled to begin Jan. 1, in the spring. But the same idea has been added to the mix on Thursday in order to provide cover for conservatives who noted that the first part of Plan B involved no spending cuts.

This bill, which Senate Democrats promise will be dead on arrival and which the White House has promised to veto, is seen by Republicans as a way to pressure Obama at the negotiating table to give more on spending cuts.

“We also realize that the president’s unwillingness or inability to come to a balanced agreement with our speaker presents us with very little option other than to try and work hard to avoid a tax hike on so many millions of Americans,” said House majority leader Eric Cantor (R) of Virginia at a morning news conference.

Likewise, Republicans in the Senate, who have been largely shut out of the talks to date, can now join the fray by calling for the Senate to bring up the House bill.

“You’ve got one chance to put your money where your mouth is – and that’s by voting on the bill the House sends over today. It will be up to the majority leader to act,” Senate minority leader Mitch McConnell (R) of Kentucky said on the Senate floor Thursday. “Will the Senate just sit back and watch the tax rates go up or will the Senate act?”

Democrats have called the move a “ploy,” with Rep. Chris Van Hollen (D) of Maryland pointing out that the Senate has already rejected the House spending-cut measure – and that it’s the speaker who needs to respond to the president’s latest offer.

“We need to stop the meat-ax cuts scheduled to start next year through the sequester – but Speaker Boehner walked away from talks with President Obama to do that in a balanced way,” Representative Van Hollen, the House Budget Committee’s top Democrat, said in a statement. “Instead, he’ll take partisan legislation to the floor today that will hurt American families and further push us toward the edge of the fiscal cliff.”

The current negotiations appear to have bogged down around about $300 billion in spending cuts and higher revenues over the next decade. At $30 billion per year over that time, they add up to less than 1 percent federal spending on an annual basis during that period.

The president has offered $1.2 trillion in higher revenues and $930 billion in spending reductions, including cuts to entitlement spending. Counting lower interest on the national debt, which Republicans balk at considering, the president’s spending reductions rise to about $1.2 trillion. The speaker has insisted on an at least an even split between revenues and spending reductions alongside a pathway to tax reform of the individual and corporate income taxes in the year to come.

If and when the House passes its pair of bills Thursday evening, an issue that has soaked up much of the political oxygen in Washington this week will dissipate – leaving both sides roughly where they started the week but with a bit over a week remaining before year's end.

With many congressional leaders flying to Hawaii for the late Sen. Daniel Inouye’s (D) funeral on Sunday (and thus preventing a full weekend of work in the Senate), lawmakers aren’t hopeful that they’ll be able to stay home for the holidays come next week.

Senate majority leader Harry Reid (D) of Nevada said that senators would be back in Washington on Dec. 27, deal or no deal, to handle other legislative priorities, including supplemental funding to relieve areas hard-hit by superstorm Sandy. The House has made no such definitive statements about its schedule.