(MENAFN - AFP) US House Speaker John Boehner unveiled his "Plan B" on Tuesday as Republican lawmakers wrangled with Democratic President Barack Obama over how to steer the economy past the so-called fiscal cliff.
Boehner, whose party holds a majority in the lower house, said he was now prepared to countenance a tax rise for Americans earning more than 1 million per year, a concession but one that falls short of Obama's demands.
The president wants to raise taxes on those earning more than 400,000, and Boehner's much-heralded offer was dismissed by Democrats as a political ploy.
If the two camps cannot come to an agreement as to how to balance spending and tax policy before year's end, the US economy will plunge over the cliff, with a deadly package of deep cuts and sharp tax increases taking effect.
Boehner told reporters he would bring a bill to the floor of the House to extend tax cuts passed under former president George W. Bush for all Americans earning less than 1 million, saying it was a reasonable move.
"I believe it's important that we protect as many American taxpayers as we can, and our 'Plan B' is to protect the American taxpayers who make 1 million or less, and have all of their current rates extended," he said.
He described 'Plan B' as a backup strategy in case he and Obama are unable to meet the year-end deadline -- in which case the Bush cuts expire and taxes will rise across the board, taking in 500 billion in new revenue.
Economists have warned that this, combined with massive cutbacks in government spending, could plunge the United States -- and perhaps many other countries -- back into recession.
"We have to stop whatever tax rate increases we can," Boehner told fellow Republicans.
His strategy, which does not address federal spending cuts that would be crucial to any fiscal cliff equation, was quickly rejected by the White House and other Democrats.
"The parameters of a deal are clear, and the president is willing to continue to work with Republicans to reach a bipartisan solution that averts the fiscal cliff," press secretary Jay Carney said in a statement.
"The speaker's 'Plan B' approach doesn't meet this test because it can't pass the Senate and therefore will not protect middle class families, and does little to address our fiscal challenges with zero spending cuts."
Obama, Carney said, remains "hopeful that both sides can work out remaining differences and reach a solution so we don't miss the opportunity in front of us today."
Democrats have long called for Boehner to bring a bill to the House floor that extends Bush-era tax cuts for households making under 250,000 per year.
But Obama offered a concession to Boehner on Monday, raising his threshold to those making 400,000. Boehner's office welcomed the narrowing of positions, but the speaker made it clear there was no deal yet.
The number two Democrat in the House, Steny Hoyer, said the math comes up short on Boehner's latest tax offer.
"I think it's a political ploy to give his members some opportunity to respond to the public that thinks all the Republicans are doing is protecting the wealthy," he said, adding that Democrats will oppose the Boehner bill.
Boehner and Obama have engaged in fevered negotiations in recent days, including a face-to-face meeting Monday at the White House and a phone call later that night.