Economy & Budget

Fiscal cliff update Dec. 20: House Plan B fails

Fiscal cliff update Dec. 20: House Plan B fails

11 days and counting. Today — Thursday — House Republican leadership is expected to work to take up Speaker John Boehner’s (R-Ohio) proposal to stave off the fiscal cliff: raise taxes on those making at least $1 million, while not detailing any specific cuts to the federal government’s budget.  Entitlement programs are continuing to swell at an unsustainable rate, as we’ve been told before, but the most important thing right now, it seems, is that Republicans are able to put something on the table and walk away before Christmas.

President Barack Obama has already indicated his opposition to Boehner’s Plan B, saying he would veto the legislation if it ever made it to his desk.

At the moment, conservative activists are at best split down the middle over whether to approve the speaker’s hasty and inadequate proposal. Groups such as Heritage Action and the Club for Growth have stated their opposition, whereas Grover Norquist’s Americans for Tax Reform have given congressional members permission to vote for the bill, while endorsing it.

The fight between the conservative base and the establishment of the Republican Party has seemingly found another outlet, as staffers close to discussions say that talk between these two factions has been heated and acrimonious.  This is another drama that will undoubtedly continue to play itself out in the days and weeks ahead; not only with regards to the fiscal cliff, but also on looming gun control legislation and the ever-present debt ceiling, which is slated to return by February.

Stay up to date on the latest with updates and stories below:

Human Events: Plan B deal collapses, House goes home
A defection of conservative Republicans forced House Speaker John Boehner to abandon his final-hour plan to block automatic tax increases, leaving taxpayers hanging on the edge of the fiscal cliff that is scheduled to crumble on Jan. 1.  “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 statement Thursday night after cancelling the vote and sending members home for the Christmas holiday.  “Now it is up to the president to work with Sen. (Harry) Reid on legislation to avert the fiscal cliff,” Boehner said.

WaPo: Boehner urges Senate to vote on Plan B; Democrats reject GOP-only tax bill
House Speaker John A. Boehner (R-Ohio) called on Senate leaders Thursday to schedule a vote on his plan to extend tax cuts on income up to $1 million — known as Plan B — if it passes the House later in the day.  But Senate Majority Leader Harry M. Reid (D-Nev.) pledged that the Democratic-controlled chamber would not vote on Plan B even if Boehner could muster the Republican votes necessary to send the measure to the Senate. Illustrating Boehner’s difficulties, the conservative Club for Growth not only reiterated its opposition to his plan to raise taxes on people earning more than $1 million a year, but urged lawmakers to reject a separate Republican bill that would partially avert a series of spending cuts set to take effect in January.  Boehner argued Thursday afternoon that Plan B would shield more than 99 percent of Americans from a tax hike scheduled to be implemented without congressional action next month along with the huge spending cuts.

Politico: White House: ‘Plan B’ a dead end
White House press secretary Jay Carney said Thursday that House Republicans are wasting time on an “exercise in futility” — working to pass their so-called ‘Plan B’ — while the country marches toward the fiscal cliff.  “The Republicans in the House have decided to run down an alley that has no exit while we all watch,” Carney said.  He said President Obama “is ready right now” to negotiate a compromise but needs Republicans to come back to the table. Instead, Carney said, “They’re wasting a lot of time on an effort that is pointless.”

CBS News: House GOP: We have the votes for “Plan B”
As the House readies for an expected vote on an alternate plan, dubbed “Plan B,” to avoid massive tax hikes on all income earners, House Majority Leader Eric Cantor, R-Va., said he is confident he will have enough support to pass their plan.  “We’re going to have the votes,” Cantor told reporters this morning.  “Plan B,” a scaled-back measure that extends tax rates for everyone except those making $1 million, comes to the House floor at the unilateral direction of Republican leadership just days after it seemed talks between House Speaker John Boehner, R-Ohio, and President Obama were progressing to avert the so-called “fiscal cliff.” Both sides offered major concessions to move toward compromise, but aides tell CBS News White House correspondent Major Garrett that Boehner didn’t have enough support in his party to pass his proposal that included $1 trillion worth of revenue increases.

WaPo: ‘Cliff’ standoff: Boehner works to wrangle votes for ‘Plan B’; Obama threatens veto
House GOP leaders are scrambling to rally their members for a vote expected by early evening on a plan to extend tax cuts on income up to $1 million, defying President Obama’s veto threat and setting up a showdown that could send Washington over the year-end “fiscal cliff.”  Speaker John A. Boehner (R-Ohio) paced the House aisles on Wednesday as he shook hands, patted shoulders and buttonholed his fellow Republicans in search of support for his plan. The proposal would extend tax rates for the overwhelming majority of workers while deferring action on other austerity measures, such as automatic cuts in domestic and military spending, slated to hit next month.

WSJ: A Bad Budget Deal
It’s clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend. Consider the tax increase now being touted as a sign of “compromise.” Speaker John Boehner has moved from opposing higher tax rates to offering higher rates for incomes above $1 million a year. While that’s better than the scheduled increase on incomes above $200,000 a year (for singles), it would still put the GOP on record as endorsing a tax increase, in particular on small businesses that file individual returns.

Businessweek: Obama Splits Republican Alliance With CEOs Favoring Tax Increase
Even as President Barack Obama was being attacked in campaign commercials funded in part by America’s business elite, he was making plans to enlist corporate chiefs to help in his first post-election battle. Within 36 hours of the Nov. 6 vote, White House aides returned from victory celebrations in Chicago and began calling business leaders urging them to press for a budget compromise, including Obama’s demand for higher tax rates on the wealthy.

Human Events: Obama uses hurricane, school shootings to push his tax agenda
If you’ve never played the “What If a Republican Had Said It?” game with Obama, this is a great place to start.  The media would be questioning the man’s mental fitness to hold office, if he belonged to the other party.  It would take every ounce of self-control possessed by media anchors to avoid screaming “How dare he!” as they replayed the clip five thousand times.  This is not substantially different from questioning the patriotism of political opponents.  Obama is questioning the very humanity of those who oppose his political agenda.  And it wasn’t just an unfortunate slip of the tongue, because he repeated his effort to use the Newtown outrage as political leverage later in the same appearance, during his response to a question from a reporter.

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