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White House Issues ‘Plan B’ Veto Threat

Dec. 19, 2012 - 12:38PM   |  
By JOHN T. BENNETT   |   Comments
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U.S. President Barack Obama would veto legislation floated by House Speaker John Boehner that would raise taxes on high-earning Americans and extend middle-class breaks but still allows deep Pentagon cuts to occur.

The White House on Dec. 19 issued a sharp veto threat of the Ohio Republican’s “Plan B” bill, which Boehner described a day earlier as a necessary step to “protect” the middle class and partially avoid the fiscal cliff.

“The deficit reduction is minimal, and perversely, given its authors, solely through tax increases with no spending cuts,” White House Communications Director Dan Pfeiffer said in a Dec. 19 statement. “This approach does not meet the test of balance, and the president would veto the legislation in the unlikely event of its passage.

A White House analysis of the speaker’s Plan B criticizes it for leaving “in place a sequester that threatens education, research and our national security.” That same document bluntly said Boehner’s self-described backup plan would do “nothing to stop much of the damage from the fiscal cliff.”

As Boehner put it during a Dec. 18 press conference, his bill “would not touch the sequester,” a reference to identical $500 billion cuts to planned national security and domestic spending over the next decade that will kick in Jan. 2 if Congress and Obama fail to strike a deal that slashes $1.2 trillion from the federal deficit.

Boehner’s Plan B would fail to meet that mandated target, meaning the sequester cuts would kick in, even if Obama did sign it. Boehner indicated he would bring the alternative fiscal bill to a vote on the House floor later this week, likely on Dec. 20.

So, ironically, the GOP speaker would be asking his mostly pro-military and pro-defense business sector Republican caucus — and many Democrats who fit that description yet are needed to pass the “Plan B” package — to vote in favor of the sequestration cuts.

Several of those hawkish Republicans told reporters Dec. 18 they have very little insight into the talks. And both opted against criticizing Boehner for floating a plan that essentially would force Republicans to vote for deep military cuts.

“[Boehner’s] ‘Plan A’ was to have a program to work all those [fiscal] issues. He hasn’t been able to get the White House to come together on that agreement,” House Armed Services Committee Chairman Howard “Buck” McKeon, R-Calif., told Defense News. “My understanding is the president has engaged in the last few days and they have made some progress.

“But it’s getting so close now” to a Dec. 31 deadline to pass the broader deficit-cutting bill, McKeon said. “[Boehner’s] going to have to move forward with ‘Plan B.’ ”

Hours earlier, Senate Armed Services Committee Ranking Member John McCain, R-Ariz., told reporters he would not criticize the GOP speaker’s gambits in the tense talks.

“I strongly approve of all the negotiations that are going on,” McCain said, “and I’m not going to take shots from the peanut gallery.”

Gordon Adams, who ran national security budgeting for the Clinton administration said he is “not sure why Boehner doesn’t want to deal with the sequester.”

“I don’t think he had the Buck McKeons in mind. … This entire situation is about revenue and entitlements, so I expect he wants to be able to say, ‘I’ve raised taxes on the highest earning folks and [Obama and congressional Democrats] need to deal with the rest of it. But I’ve dealt with this issue’,” Adams said. “I think the speaker wants to be able to say he got one side of the fiscal cliff debate off the table.”

Pentagon officials, most industry executives and hawkish lawmakers continue to warn that deep cuts to planned Defense Department spending would degrade the U.S. military’s combat power and erode an already staggering defense industrial base.

Many in the defense-industrial-congressional realm have called for deep entitlement and other federal spending cuts to get to the $1.2 trillion target to avoid the Pentagon cuts.

Members in that sector, especially on Capitol Hill, are Republicans, and an increasing number of hawkish GOP members have said they would vote in favor of new revenues to hit the target. But they still want non-defense spending cuts and a smaller federal government that spends less.

To that end, Obama’s lieutenants say the president has offered ample cuts.

“The president … has put forward a proposal that meets the speaker halfway on both taxes and spending,” Pfeiffer said, “offering to work with Republicans to cut spending by an additional more than one trillion dollars beyond what he has already signed into law.”

This week, Obama sent lawmakers a deal that backed off his long-held demand that tax cuts for families earning more than $250,000 annually be allowed to expire, raising his offer to those making more than $400,000 annually.

A compromise on just which American earners pay higher tax rates is necessary to avoid the Pentagon cuts. There is some optimism on Capitol Hill that the two sides are moving closer to an accord on that issue.

But spending cuts remain a major stumbling block.

The White House says Obama’s latest offer calls for equal amounts — $1.2 trillion — in new revenues and spending cuts. Yet, Boehner told reporters Dec. 18: “We do not have a balanced plan.”

The speaker said House Republican leaders have calculated that Obama “proposes $1.3 trillion” in revenues “but only $850 billion in cuts over 10 years.”

Boehner said he has told the president he would put forth $1 trillion in revenues if Obama offers an equal amount of spending cuts over 10 years.

The White House statement did not indicate whether Obama would change the cuts portion of his offer.

Several congressional sources indicated the president’s new plan would, as reported earlier this week, feature $100 billion in cuts to planned national security spending over 10 years. A White House spokesman did not respond to a reporter’s email inquiry.

“Oh, I think something around $100 billion from defense” in a final fiscal cliff-avoidance package “is where this is headed,” said Adams, now with American University and the Stimson Center.

“When this comes home, the end will do something to discretionary spending that is residual,” he said. “It will have to be a low number, both for the defense piece and the domestic piece because that’s how you get Republicans and Democrats in the House. It’s kind of like gambling in Casablanca: I’m shocked to know it goes on here.”

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