What now? 'Plan B' collapse leaves fiscal crisis solution in doubt
Published December 21, 2012
After House Speaker John Boehner's "Plan B" for averting the fiscal crisis withered Thursday night in the absence of enough Republican support, one question echoed through Washington -- what now?
Americans are facing a gut-punch of tax hikes in just 11 days without a deal. But there's no real working plan. Talks between Boehner and President Obama aimed at crafting a compromise are on ice. The House won't pass the bill, which contains tax hikes, that Senate Democrats want. The Senate won't pass the bill, which contains zero tax hikes, that House Republicans want.
And Boehner's plan, to extend current rates for all but those making more than $1 million, may be dead.
Boehner, sending his members home for the holidays, on Thursday night pressed the Senate to act.
"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. "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff."
But the reality remains that any package to avert the crisis must pass both chambers. Boehner may be facing the balancing act of his political career. Democrats claimed that without a robust coalition of Republicans behind him, Boehner would have to compromise with them.
But if the speaker goes too far to the left, he could easily lose Republicans.
Boehner's Republican allies were fuming Thursday night at the course of events.
"It's the same 40 chuckleheads that screwed this place up," Rep. Steve LaTourette, R-Ohio, said, referencing the conservative lawmakers who were opposed to raising tax rates at any level. "(Boehner's) done everything to make nice to them."
During an emergency conference meeting Thursday night, Fox News is told that Rep. Mike Kelly, R-Pa., jumped up and implored members to reconsider. He asked: "Is this the best we can do? Is this the best we can do for John Boehner?"
Stock futures tumbled on the news out of Washington Thursday night, as some lawmakers expressed concern about what the development would mean for trading.
The House was able to pass a plan Thursday to replace automatic spending cuts set to hit next month. But in a sign of trouble ahead, it passed narrowly on a 215-209 vote. The House was later called into recess before the vote on the tax bill, and shortly afterward Boehner pulled the bill.
The tumult raised even more questions about how lawmakers, if at all, might be able to avoid the crushing wave of tax hikes and spending cuts poised to hit at the beginning of January.
In a statement Thursday night, the White House said the "President 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."
The House bills, though, had been adamantly opposed anyway by Democrats in both chambers.
Senate Democratic Leader Harry Reid said Thursday that the Senate would not take up the House bills.
White House Press Secretary Jay Carney reiterated that "the president would veto it if it got to his desk."
After the House passed its first bill, to replace sweeping cuts to defense with cuts elsewhere in the budget, the White House again issued a formal veto threat.
Boehner and Obama had until early this week been engaged in seemingly productive talks toward a compromise package. The move to draft a "Plan B" might have been aimed at strengthening Boehner's negotiating position, as he tries to extract more spending cuts and more modest tax rate hikes from the White House as part of any deal. But Democrats were so angered by the new proposal that the future of talks is unclear.
On the sidelines, senior administration officials were claiming Thursday that Boehner turned to "Plan B" because he concluded he couldn't garner enough support for Obama's counterproposal in the House. That proposal would raise taxes only on income above $400,000, though Carney indicated that might not be Obama's final offer.
Boehner spokesman Michael Steel called the theory "stupid and untrue." He said Boehner was always clear "that he could not support the president's plan, let alone recommend it to members of the House."
Boehner claimed Thursday that the problem is Obama is "unwilling to stand up to his own party" and demand serious spending cuts. "I did my part -- they did nothing," Boehner said, referencing his willingness to discuss raising tax rates.
It's unclear whether Boehner and Obama will return to the negotiating table -- or, as Boehner's statement implied, the House might simply await action on the Senate side.
Read more: http://www.foxnews.com/politics/2012/12/21/what-now-plan-b-stall-out-leaves-fiscal-crisis-solution-in-doubt/#ixzz2FhZ9mi4s