(WASHINGTON) — With President Obama and the Senate headed back to Washington, the impetus is on Senate Majority Leader Harry Reid to come up with a new plan to avoid the fiscal cliff on Jan. 1, when a set of automatic budget cuts and tax increases will take hold if Democrats and Republicans fail to come together on a deal.
Reid’s plan would serve as a Democratic counterpart to House Speaker John Boehner’s plan B, which failed to gain enough support for a vote last week. Boehner left the ball in the Senate’s court after withdrawing his plan Thursday.
“Now it is up to the president to work with [Democratic Senate Majority Leader Harry] Reid on legislation to avert the fiscal cliff,” Boehner, R-Ohio, wrote in a statement after pulling plan B off the table. “The House has already passed legislation to stop all of the Jan. 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation’s crippling debt. The Senate must now act.”
President Obama is getting in one last round of golf on the Marine Corps Base in Kaneohe before heading back from his vacation in Hawaii late Wednesday night.
Any plan from Reid would likely include extending the Bush tax cuts for Americans making $250,000 or less.
This has been a sticking point for the left and the right throughout discussions. Democrats believe that lower- and middle-class families should keep the tax cut, while letting it expire for households making more than $250,000. Republicans counter that no Americans should be forced to pay higher taxes come Jan. 1, though Boehner’s plan would have required those making more than $1 million to lose the cut.
Reid could also propose cuts to tax deductions to generate more federal revenue.
Boehner press secretary Michael Steel told ABC News the speaker’s office “will take a look” at Reid’s proposal once he brings it up for a vote or shares his ideas with the House.
Boehner and the top GOP House leaders said following a conference call Wednesday that the Senate must act first before the House acts again. Then, the leaders say, the House will take a look and consider whether to amend or pass.
Here is their statement:
The House has acted on two bills which collectively would avert the entire fiscal cliff if enacted. Those bills await action by the Senate. If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House. Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments. The House will take this action on whatever the Senate can pass, but the Senate first must act. The lines of communication remain open, and we will continue to work with our colleagues to avert the largest tax hike in American history, and to address the underlying problem, which is spending.
Copyright 2012 ABC News Radio