Fears of a political stalemate and budget impasse over the looming “fiscal cliff” between Republicans and Democrats concerning key fiscal policy issues have renewed some jitters in the market.
Republican House Speaker John Boehner (R-Ohio) announced on Wednesday that he would call for a House vote on Thursday for the Republican budget proposal, known as “Plan B” with the hope that it would receive enough votes to move to the Democratic majority Senate.
Speaking to reporters on Wednesday, Speaker Boehner voiced criticism over the President’s latest budget counteroffer.
“The president’s offer of $1.3 trillion in revenues and $850 billion in spending reductions fails to meet the test that the president promised the American people – a balanced approach. And I hope the president will get serious soon about providing and working with us on a balanced approach.”
Although Boehner’s “Plan B” stands little chance of ever gaining enough votes to move past the Democrat majority Senate, Speaker Boehner spoke in stark terms on Wednesday when he suggested that President Obama should call on Senate Democrats to help pass that bill or else take responsibility for sending America over the “fiscal cliff” with across the board tax increases for all Americans.
“Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American – 99.81 percent of the American people. And then the president will have a decision to make: He can call on Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history.”
Senate Democrats have already shown little motivation to help move “Plan B” to the desk of President Obama for passage.
“Speaker Boehner’s ‘plan B’ is the farthest thing from a balanced approach,” Senate Majority Leader Harry Reid’s office wrote in a statement. “It will not protect middle class families because it cannot pass both Houses of Congress.”
On Wednesday, Obama threatened to veto the Republican “Plan B,” if Congress ever approves it.
Obama told reporters that Republicans were focused too much on besting him personally rather than thinking about what’s best for the country.
“What separates us is probably a few hundred billion dollars. The idea that we would put our economy at risk because you can’t bridge that gap doesn’t make a lot of sense” Obama said.
President Obama explained during a question and answer session with reporters on Wednesday that he has gone “at least half way” in meeting some of the Republican concerns.
“Frankly, up until a couple days ago if you looked at it, the Republicans in the House and Speaker Boehner were in a position to say, ‘We’ve gotten a fair deal‘ ” Obama said.
According to President Obama’s latest budget counteroffer this week, he has compromised on some key fiscal issues such as increasing the size of his proposed budget cuts and increasing the qualifying limit from $250,000 to $400,000 per year for families to pay a higher tax rate.
Obama’s latest counteroffer includes federal spending cuts that total $1.22 trillion, including interest with $400 billion in health related cuts, up from 350,000 billion.
However, Republicans estimate that the consumer price index (CPI), a measurement of the changing costs of consumer goods over time, would actually increase tax revenues by an additional $95 billion over Obama’s estimate of $1.2 trillion, raising the number closer to $1.3 trillion.