Divided Republicans block Boehner’s fiscal cliff plan

WASHINGTON - Agence France-Presse

US Speaker of the House John Boehner(R), Vice-President Joe Biden (L), and Senate Minority Leader Mitch McConnell looks on from the rear as they attend a funeral in Washington.

Republican plan to let tax breaks expire on U.S. millionaires collapsed late Dec. 20 when it failed to earn enough party support, leaving talks on averting the “fiscal cliff” up in the air.

House Speaker John Boehner had boasted sufficient support for his “Plan B” to put pressure on President Barack Obama to break the stalemate over how to avoid the tax hikes and mandatory spending cuts set to kick in on Jan. 1.

But Democrats balked at the initiative, and conservatives opposed to raising taxes on anyone, even the wealthy, revolted. Boehner, who sought to use the vote as leverage in his talks with Obama, was forced to pull back.

The abrupt turn of events left precious little time for a divided government to prevent across-the-board tax increases and deep spending cuts from taking effect with the new year. Economists say the combination threatened a return to recession for an economy that has been recovering slowly from the last one.

“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 calling a brief meeting with his Republican caucus. “Now it is up to the president to work with Senator [Harry] Reid on legislation to avert the fiscal cliff,” he added.

Adjourned until Christmas

House Majority Leader Eric Cantor said the House of Representatives now stood adjourned until after Christmas. Boehner must now work with Obama and the Democrats, who control the Senate and could potentially shepherd a bill approved by moderate Republicans through the House, if he hopes to avoid the year-end fiscal cliff.

“Plan B ... is a multi-day exercise in futility at a time when we do not have the luxury of exercises in futility,” White House spokesman Jay Carney said hours before the vote in the House. “It cannot pass the Senate. The president would veto it.” But shortly after Plan B crashed to defeat, Carney put out a more conciliatory statement, saying a “bipartisan solution” was still possible.
Obama “will work with

Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy.” Boehner’s plan would have extended George W. Bush-era tax breaks for everyone apart from those earning more than $1 million a year and also redirect automatic spending cuts away from defense to other programs.

Republican leaders sweetened the deal by offering a companion spending cut bill, in a bid to win over deficit hawks that see government spending as the main driver behind the country’s $16 billion debt.
But the White House charged that the bill would offer big tax breaks to wealthy Americans earning less than $1 million who do not need them.