The White House has rejected House of Representatives Speaker John Boehner's "fiscal cliff" backup proposal, saying it fails to meet President Barack Obama's call for a balanced approach and does not put enough of a tax burden on the wealthiest Americans.
"He [Obama] is not willing to accept a deal that doesn't ask enough of the very wealthiest in taxes and instead shifts the
burden to the middle class and seniors," Jay Carney, White House spokesman, said in a statement on Tuesday.
"The president is 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."
The White House weighed in after an aide to Boehner, the top Republican in Congress, said the the speaker would begin work on "Plan B" legislation, which would simply extend lower tax rates for incomes below $1m a year, while negotiations proceed with the White House on a broader tax and spending deal.
Still, the Ohio Republican said his talks with Obama will continue.
Earlier, Senate Majority Leader Harry Reid said Boehner's plan would not pass the Democratic-run Senate.
Reid, a Democrat, said Boehner instead should focus on reaching a broad deficit-reduction deal with Obama.
"Now is the time to show leadership, not kick the can down the road," said Reid, who also cautioned Boehner to avoid succumbing to tea party pressure.
Last July, Reid's Democrats passed a bill in the Senate that would have continued low tax rates, which are set to expire on December 31, for families with net incomes below $250,000.
Without an agreement, taxes will rise for nearly every American on January 1 and wide-ranging spending cuts will also begin taking effect.