With time running short, House Speaker John Boehner on Tuesday offered a fall-back option to avert the looming fiscal crisis, pitching a proposal to rank-and-file Republicans that would prevent a tax hike for most Americans.
The move comes amid accelerating talks with President Obama, but is being positioned as a "Plan B" in case those talks fail to yield a compromise before a Jan. 1 deadline -- that's when taxes are set to rise on everyone, followed by a wave of spending cuts.
"Every income tax filer in America is going to pay higher rates come Jan. 1 unless Congress acts," Boehner said.
Boehner, with no less than his leadership standing on the line, is trying to walk a tightrope in negotiations as the president demands tax hikes that many Republicans adamantly oppose.
The speaker on Tuesday called for a version of the plan he pitched last week. Boehner called for taxes to rise only on households making more than $1 million. His plan also calls for entitlement cuts and a tax reform debate next year.
The move could be a failsafe option, in case Boehner is unable to secure the votes to pass any future deal struck with the White House. But it also could be used to spur Obama to compromise a bit more.
"The president is not there yet," Boehner said.
A Boehner aide said the speaker is "hopeful an agreement will be reached," but complained that the president's latest counteroffer includes $1.3 trillion in revenue increases and "only" $850 billion in spending cuts.
"The threat of all current tax rates expiring is too great to not have a backup plan," the aide said.
House Republican Leader Eric Cantor, putting pressure on the president, said the "alternative plan" is being discussed in case Obama "cannot come our way."
"He has not come to where he needs to be," Cantor said.
A big challenge for Boehner is whether he can sell any compromise struck with the White House to rank-and-file Republicans. His offer to raise taxes on those making more than $1 million drew the ire of some conservatives, as did talk that he's considering allowing a debt ceiling increase that would prevent a battle over that issue for another year.
Obama, though, is demanding far more. In an offer presented Monday, the president asked for a two-year reprieve on the debt ceiling. He backed off his position that tax rates rise on households making more than $250,000, upping the threshold to $400,000 -- but that's still a bigger swath of taxpayers than Boehner is looking at. Plus, the president continues to call for stimulus spending to be part of the package.
For taxpayers, a host of benefits and tax provisions are on the line. Without a deal, tax rates rise for everyone -- with middle-income families facing a roughly $2,000 increase next year. Capital gains and dividends rates would also go up, and long-term unemployment aid would expire.
With a deal, most Americans would likely be spared major tax increases -- but those making above a certain threshold could still be hit, depending on what both sides agree to. Certain entitlement programs could also be cut, including Medicare and Social Security. Obama has indicated he's willing to agree to smaller cost-of-living increases for Social Security recipients.
In terms of logistics, the House is tentatively planning to take up the "Plan B" proposal later this week, as early as Thursday. They would do it by amending a bill previously passed by the Senate that tracked more with Obama's original offer.
Then, the House would send the bill back to the Senate -- where it would likely sit as a potential last resort in case Obama and Boehner cannot strike a deal.
Pressed Tuesday on what terms he's looking for in talks with Obama, Boehner said a plan that cuts $1 trillion from the budget and raises $1 trillion in revenue would be "balanced."
Fox News' Chad Pergram contributed to this report.
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