White House threatens veto of Boehner's 'Plan B'

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The White House says President Barack Obama would veto House Speaker John Boehner's 'Plan B' proposal for extending tax cuts for people making up to $1 million.

White House communications director Dan Pfeiffer says it is unlikely that such a bill would pass the Senate. In a statement, he says the deficit reduction that would result from the 'Plan B' approach is minimal and offers no spending cuts.

Pfeiffer says Obama urges Republican leaders to work with the White House to find a reasonable solution instead of engaging in "political exercises." Unless both sides reach an agreement, a series of tax hikes and spending cuts will go into effect starting Jan. 1.

See the White House's analysis of Plan B here.

Republicans are planning a vote on plan B as early as Thursday to keep taxes low for everyone making under a million dollars a year.

"We're going to have to go to plan B because we want to make sure we do not go off the cliff," said Rep. Kevin McCarthy (R-CA).

But Sen. Harry Reid (D-NV) warned, "Everyone should understand Boehner's proposal will not pass the Senate."

Republicans see the "million-dollar" vote as a last-ditch effort to save business owners from higher taxes.

"All of us recognize that the top rate is going to go up," said Rep. Jeff Flake (R-AZ).

"Our job is to keep those taxes down as much as possible," said Rep. Michael Grimm (R-NY).

Meantime, Fitch Ratings is warning that the U.S. is more likely to lose its top-notch "AAA" rating if lawmakers cannot agree on how to cut the deficit, sending the country over the "fiscal cliff" of broad government spending cuts and tax increases next year.

But the credit ratings agency said in a report Wednesday that if lawmakers can agree on a deficit-cutting plan, the U.S. would be more likely keep its "AAA" debt rating. Fitch would raise its outlook to stable from negative

In November Fitch said that President Barack Obama must work toward a credible plan to avoid the fiscal cliff or risk losing its "AAA" rating.

In the first-ever downgrade of U.S. government debt, Standard & Poor's last year cut its rating from "'AAA" to "AA+."

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