Politicsfiscal-cliff-dealPoliticsHouse Republicans

Fiscal Cliff 'Doomsday Plan': House GOP Reportedly May Vote Only On Extending Middle Class Tax Cuts

House GOP Considering Fiscal Cliff 'Doomsday Plan'
Sarah Bufkin
Open Image Modal
WASHINGTON - NOVEMBER 7: House Speaker John Boehner (R-OH) makes remarks on Capitol Hill on November 7, 2012 in Washington, DC. Boehner discussed the looming fiscal cliff and called on President Obama to work with House Republicans. (Photo by Brendan Hoffman/Getty Images)

Republican lawmakers are reportedly considering a so-called "doomsday plan" that would allow middle-class tax cuts to pass the House of Representatives while punting on other elements of the "fiscal cliff." President Barack Obama would get his way on higher taxes for household incomes above $250,000.

The doomsday plan would delay until 2013 any action on a grand bargain concerning the government's borrowing limits, tax reform, entitlement reform, unemployment benefits or the series of severe spending cuts set to take effect as part of the cliff. From ABC's Jonathan Karl:

Two senior Republican elected officials tell me this doomsday plan is becoming the most likely scenario. A top GOP House leadership aide confirms the plan is under consideration, but says Speaker [John] Boehner (R-Ohio) has made no decision on whether to pursue it.

If House Republicans follow through with this plan, they will delay any tough decisions on spending cuts or raising the debt ceiling, which will send the nation into 2013 with a large dose of uncertainty on a number of fronts.

But it would give them wiggle room on what they have long characterized as the politically unviable situation of extending the Bush tax cuts for the lower and middle-class Americans, while allowing them to increase for those making over $250,000. During the 2011 debt ceiling negotiations, Boehner ruled out any possibility that Republicans would allow taxes to go up on the nation's wealthiest.

But since the 2012 elections, the President Barack Obama has repeatedly stated that he will not, under any circumstances, extend the tax cuts for the wealthy, and some GOP lawmakers have shown signs of being willing to compromise over the issue. Last week, Rep. Tom Cole (R-Okla.) told Politico that the GOP should pass the Senate bill extending tax cuts for 98 percent of Americans, arguing that it would be the smartest political move.

"That's a victory, not a loss," Cole said on This Week with George Stephanopoulos. ”"And then we're still free to try and fight over higher rates, offering revenue, which the Speaker has put on the table."

Other representatives, including Rep. Mary Bono Mack (R-Calif.), Rep. Robert Dold (R-Ill.) and Rep. Mike Simpson (R-Idaho), have indicated that they would support Cole's proposition.

Under one version of the "doomsday plan," however, the GOP lawmakers wouldn't vote to extend the tax cuts themselves, but instead would register as "present," which would allow House Democrats to pass the measure on their own.

Even if Boehner rejects the doomsday plan and decides against bringing the tax extension to the House floor for a vote, House Minority Leader Nancy Pelosi (D-Calif.) has indicated that she will force the issue by bringing the Senate bill up for a vote as a "discharge petition."

"Last July, that legislation passed the United States Senate -- the exact same bill was introduced in the House at that time, and since then we have been asking the Republican leadership to bring the middle-income tax cut to the floor," Pelosi said at a Friday press conference. "The clock is ticking. The year is ending. It’s really important, with tax legislation, for it to happen now...[The measure] has tremendous support in the Republican Caucus -- I think we would get a 100 percent vote on it if it came to the floor.”

Under such a scheme, 26 Republicans would have to vote in favor of extending the tax cuts for the bill to pass -- a number far higher than the cadre of GOP legislators who have publicly taken this position.

Eliminating the tax breaks for the nation's top two percent could raise as much as $950 billion over the next decade, the Congressional Budget Office estimates. Republicans argue that the tax hikes would hinder U.S. job growth, but a report from the Congressional Research Service found that tax cuts for the wealthiest had no meaningful effect on economic growth.

On Monday, Boehner submitted a proposal that called for an additional $800 billion over the next decade through closing corporate tax loopholes and eliminating itemized deductions from the tax code, instead of raising the marginal tax rates on the top two percent of Americans. But a report released by the White House has already concluded that the federal government would only see an estimated $450 billion if it adopted the GOP strategy, provided that Republicans refused to eliminate their much-lauded charity exemption.

Our 2024 Coverage Needs You

As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.

Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.

to keep our news free for all.

Support HuffPost

Before You Go

What Could Fall Off The Fiscal Cliff
Military Health Care - $16 Billion(01 of14)
Open Image Modal
In his last offer to House Speaker John Boehner (R-Ohio), President Barack Obama lobbied for $16 billion in cuts from the military's health care program, TRICARE. In 2012, the president also proposed hiking fees for military personnel and veterans who receive benefits under the program in an effort to help cut the defense budget. His proposal drew significant fire from Republican lawmakers and veterans' groups. (credit:(Mark Wilson/Getty Images))
Military Retirement Program - $11 Billion(02 of14)
Open Image Modal
Both sides agreed to cuts from the military retirement program. Rep. Eric Cantor (R-Va.) claimed during July 2011 talks that lawmakers had reached a tentative deal to slash $11 billion. Under the current system, military personnel receive immediate retirement benefits after serving for 20 years. According to a recent report from the Congressional Budget Office, the appropriation cost per active military service member has increased at a higher rate than either inflation or the total pay package of private-sector employees. Given the budget constraints looming before the Defense Department, the CBO floated the idea of transitioning the military retirement program to a matching-payment model. (credit:(AP Photo/Matt York))
Federal Employee Retirement Program - $33 -$36 Billion(03 of14)
Open Image Modal
Cantor claimed that Republicans and Democrats had agreed to $36 billion in savings over 10 years from civilian retirement programs. The president proposed a marginally more modest figure of $33 billion in his final offer to House Speaker John Boehner. Just this year, Republicans in the House Committee on Oversight and Government Reform also looked to find savings from the Federal Employee Retirement System by requiring employees to pay more of their salary into their pensions, which Democrats opposed as a pay cut that would make civil service less attractive for top talent. In September 2011, the federal government employed over two million individuals, either through the cabinets or independent agencies. Many Republicans have complained that the federal workforce has ballooned during the Obama administration, and while the raw number of employees has risen by 14.4 percent between Sept. 2007 and Sept. 2011, the percentage of public employees out of the total civilian workforce has remained fairly constant around 1.2 percent since 2001. Much of the raw growth has been concentrated in the Department of Defense, Veteran's Affairs and Homeland Security. (credit:(AP Photo/Carolyn Kaster))
Agricultural Subsidies - $30 - $33 Billion(04 of14)
Open Image Modal
Democrats and Republicans agreed to cut as much as $30 billion from agricultural subsidies; the main opposition fell along geographical lines rather than partisan ones. Hailing from an agriculture-heavy state, Sen. Max Baucus (D-Mont.) threatened to pull out of talks entirely if a deal included that much in subsidy reduction. The president ended up pushing for $33 billion in cuts, but that figure also included reductions in conservation programs. Baucus now tells HuffPost any cuts should be made through the farm bill, not fiscal cliff talks. (credit:(AP Photo/Danny Johnston, file))
Food Stamps - $2 to $20 Billion(05 of14)
Open Image Modal
Cantor pushed hard for significant cuts to food stamps, formally known as the Supplemental Nutrition Assistance Program. He charged that the federal government could save as much as $20 billion over ten years by eliminating waste and fraud, but the White House countered that the real number was closer to $2 billion. Instead, those cuts would force the program to scale back on the number of enrollees and the level of benefits it could offer. (credit:(AP Photo/Matt Rourke))
Flood Assistance - $4 Billion(06 of14)
Open Image Modal
Obama proposed cutting $4 billion from flood assistance funding in his final offer to Boehner in July 2011. But Hurricane Sandy straining the National Flood Insurance Program; The New York Times reports that thousands of claims are being submitted daily, which could send the overall cost upwards of $7 billion for a program that suffers from a ballooning debt problem. And with climate change promising future flooding disasters along the eastern seaboard, cutting the program looks unwise. (credit: (AP Photo/ John Minchillo))
Home Health Care - $50 Billion(07 of14)
Open Image Modal
The president offered to cut $110 billion over the next decade from the government's health care spending, excluding Medicare. Among the programs that could lose crucial funding is home health care, where Democrats and Republicans agreed to $50 billion in reductions over ten years. Cantor pushed for closer to $300 billion in spending cuts to health care, but Democrats appeared to stand firm. (credit:(AP Photo/Tony Dejak))
Higher Education - $10 Billion(08 of14)
Open Image Modal
The president proposed cutting $10 billion from higher education over the next decade, mostly from Pell grants. Over nine million students relied on federal subsidized loans to afford college during the 2010-2011 school year, and the skyrocketing costs have continued to diminish the purchasing power of the Pell grant program. Obama has actively worked to make college more affordable for lower-income students. Key Republican lawmakers have attempted to cut funding for student loans; most notably, Rep. Paul Ryan (R-Wis.) slashed the maximum award from $5,550 per student per year down to just $3,040. (credit:(AP Photo/Jae C. Hong))
Medicaid And Other Health- $110 Billion(09 of14)
Open Image Modal
The original funding levels proposed by Cantor and the GOP leadership would turn the entitlement program for America's poor into little more than a block grant program, Democrats claimed during the 2011 debt ceiling talks. Under such a program, they argued that states would then drop more people from enrollment and scale back on health benefits. In fiscal year 2009, over 62 million Americans -- many of them children -- depended on Medicaid for their health care. But the president did agree to $110 billion in cuts from Medicaid and other health programs. (credit:(AP Photo/Rick Bowmer))
Medicare - $250 Billion +(10 of14)
Open Image Modal
Republicans pushed for a drastic overhaul to the entitlement program for America's seniors. Ryan infamously proposed turning Medicare into little more than a voucher system in which seniors would receive checks to purchase their own health care on the open market -- a plan that would ultimately force individuals to shoulder more of the burden for their health care costs. Democrats refused to accept changes similar to those in Ryan's plan. The president, however, was more open to other GOP suggestions on Medicare. In his final offer to Boehner, he agreed cut $250 billion over the next ten years -- in part by increasing premiums for higher-income seniors and by raising the eligibility age from 65 to 67 (although over a longer time frame). (credit:(AP Photo/Bill Haber, File))
Tax Reform - $800 Billion - $1.6 Trillion(11 of14)
Open Image Modal
Republicans have again and again decried any attempt to raise taxes, either on the highest earners or on corporations. (A Democracy Corps/Campaign for America's Future survey shows that 70 percent of voters support raising taxes on the wealthiest two percent of Americans.) Instead, Boehner has pushed for a comprehensive tax reform bill that would lower the marginal tax rates while closing loopholes and eliminating deductions in order to raise around $800 billion in additional revenues. For many Democrats, that figure simply isn't enough. White House Press Secretary Jay Carney announced Tuesday that the president was aiming for as much as $1.6 trillion in new revenues, and the president told reporters on Wednesday that it would be practically impossible to raise the amount of revenue he wanted simply from closing loopholes and lowering rates. (credit:(AP Photo/Charles Dharapak))
Social Security - $112 Billion(12 of14)
Open Image Modal
Social Security isn't driving the deficit, yet Republicans have pursued drastic changes to the program. Sen. Harry Reid (D-Nev.) has promised that Social Security would be off the table in the on-going negotiations to avoid the fiscal cliff, but Obama did concede to tying the benefits to a recalculated Consumer Price Index that would ultimately provide less money to retirees. Sen. Bernie Sanders claims that, under such a measure, seniors who are currently 65 years-old would see their benefits drop by $560 a month in 10 years and by as much as $1,000 in 20 years. The Moment of Truth project (led by the two former co-chairs of the president's deficit reduction commission, former Sen. Alan Simpson (R-Wyo.) and former White House Chief of Staff Erskine Bowles) claims that the recalculated CPI could save as much as $112 billion from Social Security over the next ten years. (credit:(AP Photo, File))
Tax Loopholes And Deductions - Up To $180 Billion(13 of14)
Open Image Modal
Although Cantor and other GOP House members demanded that any deficit-reduction deal brokered in 2011 be classified as revenue-neutral, they were open to closing particular loopholes in the corporate tax code and limiting itemized deductions for individuals -- given that they were offset by other tax cuts. Out of the $50 billion in savings to be found over the next decade from closing loopholes, Cantor proposed getting $3 billion from eliminating the break for corporate-jet owners and another $20 billion from voiding the subsidies for the oil and gas industries.On the individual earner side, he proposed eliminating the second-home mortgage deduction for $20 billion, as well as limiting the mortgage deduction for higher-income households to rake in another $20 billion. He also offered to tighten the tax treatment of retirement accounts. But Democrats wanted to see even greater action taken on itemized deductions. In June 2011, Rep. Chris Van Hollen (D-Md.) proposed raising $130 billion in new revenues by capping itemized deductions at 35 percent for the highest income brackets. The GOP response to his proposal at the time was a resounding "no." (credit:(Fabrice Coffrini/AFP/GettyImages))
Bush Tax Cuts For The Wealthy - $950 Billion(14 of14)
Open Image Modal
Set to expire on Dec. 31, 2012, the Bush tax cuts represent one of the most controversial elements of the so-called fiscal cliff. They added over $1.8 trillion to the deficit between 2002 and 2009. Yet Republicans argue that an extension is necessary to create jobs and spur economic growth. But a study from the Congressional Research Service found that tax cuts for the wealthiest earners had little economic effect. The White House is pushing for a renewal only of those tax breaks for the lower- and middle-class Americans in order to save the average middle-class family between $2,000 and $3,500 next year. Letting the cuts expire for those earning over $250,000 a year -- or the wealthiest two percent of Americans -- would haul in $950 billion in savings over the next decade, according to the CBO. Obama stressed how much the country stood to gain from such an approach Wednesday during a press conference. "If we right away say 98 percent of Americans are not going to see their taxes go up — 97 percent of small businesses are not going to see their taxes go up," he said. "If we get that in place, we're actually removing half of the fiscal cliff." (credit:(AP Photo/Ron Edmonds))
Suggest a correction
|
Submit a tip