A scheduled vote on House Speaker John Boehner's fiscal cliff solution, "Plan B," was abruptly canceled Thursday evening after the speaker failed to garner the support of his Republican caucus.
"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 an emergency leadership meeting. "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff. The House has already passed legislation to stop all of the Jan. 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."
Shortly after Boehner pulled the bill, White House Press Secretary Jay Carney said: "The president's main priority is to ensure that taxes don’t go up on 98 percent of Americans and 97 percent of small businesses in just a few short days. 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 vote was suddenly called off after the House voted only narrowly, 215 to 209, to pass a GOP spending reduction package and to protect military programs from steep cuts next year. It was one of two bills the House had to vote on as part of the speaker's backup plan should fiscal cliff talks with the President Barack Obama break down. That vote was a preview of what was to come, as doubt lingered whether Boehner could actually muster up the support. Pretty soon it became very apparent that he didn't have it.
Boehner proposed his “Plan B” earlier this week as another solution to the fiscal cliff – automatic federal spending cuts and tax hikes set to kick in in January. It allows a tax increase on those earning more than $1 million annually, but preserve the Bush tax breaks for those below that threshold.
Obama had said he would veto “Plan B” if it ever got to his desk, and Democrats declared it dead on arrival in the Senate.
Obama and Boehner have been in negotiations for weeks on the best plan of action before the Dec. 31 deadline. Both sides agree that inaction would result in a recession and higher unemployment rate.
Initially, Obama proposed gaining approximately $1.6 million in new revenue by taxing the wealthy. He defined those as individuals with an annual income over $200,000 and households over $250,000 – that’s including himself – and said he was open to a compromise. He also pushed Republicans to extend tax cuts for the middle class, which would give business owners a level of confidence. Obama later bended and increased that tax threshold to $400,000.
That any tax hike at all was included in “Plan B” was too much for many House Republicans.
Republicans have a longstanding agreement with anti-tax lobbyist Grover Norquist to refuse any tax increases. But his group Americans for Tax Reform said Wednesday the GOP wouldn’t be violating the "Norquist pledge" by voting for Boehner’s plan.
“Republicans supporting this bill are this week affirming to their constituents in writing that this bill — the sole purpose of which is to prevent tax increases — is consistent with the pledge they made to them,” the statement read. “In ATR’s analysis, it is extremely difficult — if not impossible — to fault these Republicans’ assertion. In particular, in this Congress the House has already voted twice to prevent any tax increases on any American. When viewed with this in mind, and considering this tax bill contains no tax increases of any kind — in fact, it permanently prevents them — matters become more clear.”
It had seemed lawmakers were going to cut a deal between $400,000 and $1 million until Boehner revealed his backup plan.