Fiscal cliff may turn to ‘Plan B’

GOP may retreat, leave fight on big issues for 2013.

WASHINGTON — It’s beginning to look like it’s time for Plan B on the “fiscal cliff.”

With talks between President Barack Obama and House Speaker John Boehner apparently stalled, the leading emerging scenario is some variation on the following: Republicans would tactically retreat and agree to raise rates on wealthier earners while leaving a host of complicated issues for next year.

The idea is that House GOP leaders would throw up their hands, pass a Senate measure extending tax rates on income exceeding $250,000, and then duke it out next year over issues like increasing the debt ceiling and switching off sweeping spending cuts that are punishment for prior failures to address the country’s deficit crisis.

It’s easier said than done. That scenario has a lot more currency with Senate Republicans, who wouldn’t have to vote for the idea after it comes back to the Democratic-controlled Senate, than with leaders of the Republican-controlled House, who would have to orchestrate it and insist they’re not abandoning talks with the White House and standing firm against raising tax rates.

“I think it’s time to end the debate on rates,” said Sen. Richard Burr, R-N.C. “It’s exactly what both parties are for. We’re for extending the middleclass rates. We can debate the upper-end rates and what they are when we get into tax reform.”

“I think we end up with something like this Plan B,” said GOP lobbyist Hazen Marshall, a longtime former Senate aide. “They probably figure out something on the rates by the end of the year but on everything else negotiations just continue.”

House Republicans have yet to embrace the idea.

White House spokesman Jay Carney said Obama was still pursuing a broader deal with Boehner that didn’t simply address the expiring tax rates, but also more revenue and spending reductions with a goal of reducing deficits. But he said that was out of reach if House Republicans refused to let the top rates rise for wealthy earners. “It is still their position, as they tell you when you ask them, that they want extension of the high-end Bush tax cuts,” Carney said. “The president will not sign such legislation.”