Short on Votes, Boehner Cancels Fiscal Cliff 'Plan B' Vote

Late Thursday evening, House Speaker John Boehner (R-Ohio) called off a vote on his latest proposal to avert the fiscal cliff, acknowledging that he did not have the needed support of members of his own party.

Boehner's so-called Plan B proposal would have extended the Bush-era tax rates on ordinary and investment income for all taxpayers with a household income less than $1 million. But a vote in the affirmative still would have required members of his caucus to go on record in support of a tax increase, even if it only would have affected less than 0.2% of Americans.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement after Republicans broke from a conference where leaders made a last-minute appeal for votes.

The evening drama followed a day of partisan posturing that saw Senate Democratic leaders and the White House blast Boehner's intention to bring to a vote a bill that they said would not be considered in the Senate, and would face a veto if it ever made it to President Obama's desk.

With that, the House went into recess, to return after Christmas with a small number of days to broker a deal ahead of the year-end deadline, when a set of automatic tax increases and across-the-board spending cuts will take effect if no agreement is reached.

Earlier in the afternoon, the House narrowly passed a bill that would replace the broad, scheduled spending cuts, or sequester, with a more targeted package that Republican backers said would eliminate or trim funding from wasteful federal programs. That package narrowly passed by a 215 to 209 margin, with 21 Republicans voting against it and no Democrats casting votes in support.

In remarks to the media and in comments on the House floor, Democrats hammered away at Boehner's plan on Thursday, describing it variously as a "nonstarter" and "dead on arrival."

"House Republicans know that the bill has no future. If they don't know it now, tell them what I said," Senate Majority Leader Harry Reid (D-Nev.) told reporters.

Boehner, meantime, framed his plan as the only serious proposal to emerge (a charge returned from the other side), and noted that House Republicans had previously approved legislation to extend all the Bush-era tax cuts.

"Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff," Boehner said after canceling the vote. "The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation's crippling debt. The Senate must now act."

Obama has called on the House to take up legislation that has cleared the Senate to extend the rates for all but the top 2% of earners.

The end-of-week theatrics followed more encouraging signs earlier in the week that Obama and Boehner could meet in the middle to broker a deal that a sufficient number of members from both parties could support.

If no deal is reached in the narrow legislative window following the Christmas recess, ordinary income rates for taxpayers across the spectrum will rise, with a top rate of 39.6%. Investment income is very much in play, as dividend rates would spike from the current top rate of 15% percent to align with ordinary income, while top rates for capital gains income would rise from 15% to 20%.

Thursday afternoon, Reid reminded reporters that hard deadlines often precipitate last-minute deal-making in Washington to avert a crisis -- in this case, many economists have warned that going over the fiscal cliff could sink the economy back into recession, particularly if no deal is reached early next year.

But the abrupt cancellation of the planned vote on Thursday if anything seemed to reinforce the difficulty Boehner will have in selling a package to his caucus that contains tax increases on the order of what Obama is proposing.

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