Boehner Challenges Obama With 'Plan B' Showdown

House Speaker John Boehner pressed his backup tax plan Wednesday despite a White House veto threat, saying it will be approved Thursday by the GOP-controlled House.

"Then the president will have a decision to make," Boehner said. "He can call on the Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history."

Earlier in the day, President Barack Obama threatened to veto Boehner's "Plan B," pressing instead for a deal to avert the "fiscal cliff." He said the two sides were only a few hundred billion dollars apart, and he hoped to get the job done before Christmas.

Wall Street investors didn't like the latest developments. (Read More: Stocks End Lower as 'Cliff' Talks Turn Sour..)

"Plan B" calls for extending tax cuts for people making up to $1 million. It got a boost Wednesday from anti-tax crusader Grover Norquist, who said it would adhere to lawmakers' pledge not to increase taxes. His support increases the likelihood of passage in the Republican-controlled House.

Tea Partyers expressed opposition to the measure Tuesday, as did the White House, which immediately rejected it, saying it was unbalanced and didn't go far enough on seeking more revenue from the wealthy.

"In the last 24 hours, the question that I get from my caucus and from some of you is, 'What is the speaker trying to prove by going to what we call Plan B?'" House Minority Leader Nancy Pelosi said.

Obama said Wednesday he would continue to work with Boehner and was prepared to do "tough things." But he said he would not compromise on his demand that he be given authority to raise the debt ceiling without Congress' approval.

"What separates us is probably a few hundred billion dollars," Obama said. "The idea that we would put our economy at risk because you can't bridge that gap doesn't make a lot of sense."

"We should be able to get this done," Obama said. "Let's get this done. We don't have a lot of time."

Obama spoke to reporters after announcing a broad administration-wide response to Friday's shooting at a Connecticut elementary school where 26 people, including 20 first graders, were killed.

"If there's one thing we should have after this week, it should be a sense of perspective about what's important," Obama said when asked whether he thought Republicans would be able to cooperate with him to avoid the tax hikes and spending cuts associated with the fiscal cliff,.

But he said congressional Republicans "keep on finding ways to say no, instead of finding ways to say yes."

The president said he there's no doubt that Boehner has challenges within the Republican caucus on reaching a deal.

Obama spoke as rhetoric over the GOP backup plan on taxes escalated, with the White House promising a veto and Boehner's office calling that threat "bizarre."

Boehner is planning a House vote on his proposal on Thursday, hoping it would raise pressure on Obama to make concessions. He made the proposal as a backup plan in the event fiscal cliff talks don't yield an agreement by the Jan. 1 deadline.

White House communications director Dan Pfeiffer said Wednesday that the deficit reduction that would result from Plan B was minimal and it offered no spending cuts.

Pfeiffer said Obama was urging Republican leaders to work with the White House to find a reasonable solution instead of engaging in "political exercises." (Read More: Fiscal Cliff Plans: How Close Are They? )

Boehner spokesman Brendan Buck responded by saying: "The White House's opposition to a back-up plan to ensure taxes don't rise on American families is growing more bizarre and irrational by the day."

He said in the absence of a larger deal on resolving the fiscal cliff, "we must act to stop taxes from rising across the board in 12 days. If Democrats disapprove of this bill, then there is a simple solution: amend it in the Senate and send it back to the House."

Despite the disagreements over Plan B, the two sides have been moving closer on the larger issue of a deal to avert the year-end fiscal cliff, when more than $600 billion in tax increases and spending cuts would automatically go into effect.

On Monday, Obama offered a plan for $1.2 trillion in revenue increases and spending reductions over 10 years. The proposal presented Friday by Boehner would raise $1 trillion over a decade. The White House also offered to extend the tax cuts for people making up to $400,000 from its earlier $200,000 for individuals.

Tax boosts on incomes above $400,000 would affect nearly 1.1 million taxpayers. Limiting the tax boosts to income exceeding $1 million would target just 237,000 households, according to the latest Internal Revenue Service figures for 2009.