Washington (CNN) — A scheduled showdown vote Thursday evening in the U.S. House will determine how Congress and the White House proceed on fiscal cliff negotiations.
With less than two weeks until the automatic tax hikes and spending cuts of the fiscal cliff take effect, the House will consider two measures proposed by Speaker John Boehner in the latest wrinkle of tense negotiations with President Barack Obama.
One of the proposals would amount to both a concession by Republicans and a hard-line stance against the president on taxes. It would extend tax cuts scheduled to expire at the end of the year for most people while allowing rates to increase to 1990s levels on income over $1 million.
A second proposal would change the automatic spending cuts set to kick in next year under the fiscal cliff, replacing cuts to the military with reductions elsewhere.
The White House threatened Wednesday to veto Boehner’s tax plan, saying it would achieve little and diverted the focus from efforts to negotiate a broader agreement to reduce the nation’s chronic federal deficits and debt.
While considered a negotiating tactic to pressure Obama to make more concessions, the vote also seeks to turn public opinion that now backs the president over Republicans in the talks.
A new CNN/ORC International poll Thursday showed that just over half of respondents believe Republicans should give up more than Democrats in any bipartisan solution to the country’s problems.
The survey also indicated that a narrow majority of Americans consider the Republican Party’s policies and views as too extreme, a first for the GOP, while fewer than a third said they trust congressional Republicans more than the president to deal with the major issues facing the nation.
Until Boehner essentially halted negotiations by introducing his so-called Plan B on Tuesday, the two sides made progress on forging a $2 trillion deficit reduction deal that included new revenue sought by Obama and spending cuts and entitlement changes desired by Boehner.
The stakes are high as economists say that failure to reach an agreement could spark another recession.
Boehner described his Plan B as a fallback option to prevent a sweeping tax hike when tax cuts from the administration of President George W. Bush expire at the end of the year.
Sources said the Boehner measure also could include extending the current estate tax and alternative minimum tax, two steps sought by Republicans.
GOP leaders also had planned to vote Thursday on Obama’s long-standing proposal to extend the Bush-era tax cuts on income up to $250,000, a lower threshold than Boehner’s alternative.
However, Republicans decided to drop the vote on Obama’s version, which was a major theme of the president’s re-election campaign.
In the negotiations, Obama had agreed to raise his threshold to income over $400,000, and a GOP aide told CNN that change made a vote on the original plan unnecessary.
At the same time, Boehner is having trouble rounding up Republican support for his Plan B. With Democrats expected to oppose it, the speaker can only afford about two dozen GOP defections to get it passed.
Because of their difficulty in securing votes from conservatives, GOP leaders added a vote Thursday on the separate measure that would replace automatic spending cuts to defense with cuts elsewhere.
Obama told reporters Wednesday that Republicans were focused too much on besting him personally rather than thinking about what’s best for the country.
“Take the deal,” Obama said to Republicans, referring to the broader proposal, adding that it would “reduce the deficit more than any other deficit reduction package” and would represent an achievement.
“They should be proud of it,” Obama said. “But they keep on finding ways to say ‘no’ as opposed to finding ways to say ‘yes.’”
In his own statement Wednesday — a 52-second appearance before reporters in which he took no questions — Boehner said the president had yet to offer a balance between increased revenue and spending cuts that he has been promising.
While the Boehner plan represents a concession from his original vow to oppose any tax rate increase, it sets a higher threshold than the $400,000 sought by Obama.
Boehner said that once his plan passes the House, Obama can either persuade Senate Democrats to accept it or “be responsible for the largest tax increase in American history.”
Anti-tax crusader Grover Norquist provided political cover for Republicans who have signed his pledge against tax increases, saying Wednesday that legislators who vote for Boehner’s Plan B would adhere to the intent of their promise.
The Obama administration and congressional Democrats said Boehner changed course because he was unable to muster Republican support for the larger deal being negotiated with the president.
At his news conference, Obama alluded to last Friday’s Connecticut school shootings in calling on Republicans to put aside political brinksmanship.
“If there’s one thing we should have after this week, it should be perspective about what’s important,” he said.
“Right now, what the country needs is for us to compromise,” Obama continued, describing the GOP refusal to accept a compromise as “puzzling.”
Asked why an agreement was proving so elusive after both sides had made concessions, Obama said it might be that “it is very hard for them to say ‘yes’ to me.”
“At some point, they’ve got to take me out of it,” Obama said of Republicans, adding that they should instead focus on “doing something good for the country.”
In addition, Obama said Wednesday Boehner’s proposal “defies logic” because it raises tax rates on some Americans, which Republicans say they do not want, and contains no spending cuts, which Republicans say they do want.
He also criticized the measure as a benefit for wealthy Americans, who would have lower tax rates on income up to $1 million.
GOP leaders planned the second vote Thursday on spending cuts after Obama spoke. It changes the painful automatic budget cuts set to take effect next year under a debt ceiling agreement in 2011 intended to spur congressional action on the deficit.
Obama and Democrats argue that increased revenue, including higher tax rates on the wealthy, must be part of broader deficit reduction plan to prevent a tax increase on middle-class Americans.
Polls have consistently showed support for the Obama plan, and some Republicans have called for acceding to the president on the tax issue in order to focus on cuts to spending and entitlement programs.
Senior administration officials said Obama and Boehner have not spoken to each other since Monday, when the president made a counter-proposal to a Republican offer over the weekend.
Both the GOP’s weekend proposal and Obama’s response included concessions, raising hopes that a deal was within reach.
Since then, conflict rather than compromise has been the public posturing of the talks.
After Boehner proposed his Plan B alternative Tuesday, Senate Majority Leader Harry Reid of Nevada said the speaker appeared to be yielding tea party conservatives opposing a wider deal.
“It would be a shame if Republicans abandoned productive negotiations due to pressure from the tea party, as they have time and again,” Reid said.
Boehner’s spokesman, Michael Steel, shot back that the Plan B proposal gave Democrats what they wanted: higher tax rates on millionaires.
However, White House spokesman Jay Carney argued that Obama and Democrats needs to secure more revenue up front to ensure that concessions on spending cuts and entitlement reforms don’t have to harm middle class Americans.
Obama’s latest counter-proposal on Monday generated protests from the liberal base of the Democratic Party because it included some changes to entitlement programs such as Social Security, Medicare and Medicaid.
In particular, liberals cited Obama’s willingness to include a new formula for the consumer price index (CPI) applied to benefits to protect against inflation.
The new calculation, called chained CPI, includes assumptions on consumer habits in response to rising prices, such as seeking cheaper alternatives, and would result in smaller benefit increases in future years.
Statistics supplied by opponents say the change would mean Social Security recipients would get $6,000 less in benefits over the first 15 years of chained CPI.
Carney said Obama’s CPI proposal “would protect vulnerable communities, including the very elderly, when it comes to Social Security recipients.”
He called the president’s acceptance of the chained CPI a signal of his willingness to compromise.