U.S. House Speaker John Boehner’s “Plan B” wasn’t supposed to be his real plan.
The proposal, which called for a tax increase on income above $1 million, was designed in part to push fellow Republicans closer to Boehner’s original offering to President Barack Obama in budget talks that called for a combination of revenue increases and spending cuts, according to two people with knowledge of the strategy.
“Plan B,” though, proved more alluring within the speaker’s caucus because it would have raised taxes on fewer people than the larger deal Obama wants, and some House Republicans started to gravitate to it. Then, even after House Majority Leader Eric Cantor said yesterday that the measure had sufficient support, Boehner had to pull the bill last night because it would have failed in a vote.
House Democrats were prepared to oppose it as a bloc, and they would have been joined by enough Republicans who continue to oppose any tax increases to kill the measure.
The flawed approach left Boehner embarrassed and Republicans without a clear alternative to Obama’s proposal to raise $1.2 trillion in taxes on high earners and cut $1.2 trillion in spending. And it threw into doubt whether Congress can pass any agreement before Jan. 1 to avert more than $600 billion in spending cuts and tax increases for all wage earners — the so-called fiscal cliff.
“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 his statement on “Plan B” last night. He will hold a news conference at 10 a.m. Washington time, his office said in a statement.
Boehner’s decision to cancel the vote is a “reflection of the inability of the entire House leadership” to persuade enough of the chamber’s other Republicans to avoid the fiscal cliff, Maryland Representative Chris Van Hollen, the top Democrat on the House Budget Committee, said in an interview with MSNBC.
U.S. index futures slumped after the vote’s cancellation. Standard & Poor’s 500 Index futures dropped 1.2 percent to 1,423 as of 7:26 a.m. today in New York after falling as much as 3.4 percent earlier in the day, the biggest intraday slide since November 2011.
Moving a Bill
Boehner’s “Plan B” was designed to start the process of moving a bill that would prevent the automatic spending cuts and tax increases set to start in January, according to a House Republican aide who asked not to be named to discuss the negotiations.
Boehner had told Obama of his decision to present the fallback plan the night before he pitched it to fellow Republicans on Dec. 18. The speaker had informed his leadership team of it the day before, according to the two people familiar with his strategy.
Once it became public, “Plan B” became more popular with some Republicans than the party’s House leaders envisioned.
“I am not for Plan A,” Representative Dan Burton, an Indiana Republican said, referring to the outlines of the more sweeping budget accord that Boehner and Obama have been negotiating. “I am for ‘Plan B.’ We had a big long conference about it.”
Boehner’s legislative tactic was designed to extract more concessions from Obama, said David Carney, who served as White House director of political affairs under President George H.W. Bush.
“The point is, you have to do something to get the White House to come more to our side,” Carney said.
In closed meetings with House Republicans, Boehner said that “if negotiations were going swimmingly with the president we wouldn’t need a ‘Plan B’,” Representative Steve LaTourette, an Ohio Republican, told reporters.
Carney said Boehner is “in a tough spot, but he’s dealing with the cards he’s got. We’re not dealing with a level playing field. The president is bigger, more powerful and has a bigger megaphone than the House and the Senate.”
The support of some Republicans for “Plan B,” which also got an endorsement from the U.S. Chamber of Commerce, wasn’t enough to sway those party members refusing to support any tax increases in dealing with Obama on the fiscal cliff.
Thwarting “Plan B” keeps Republicans from “caving on core principles,” Representative Tim Huelskamp, a Kansas Republican, told reporters last night.
Boehner said the next move is up to Obama. “Now it is up to the president to work with” Senate Majority Leader Harry Reid, a Nevada Democrat, to craft legislation “to avert the fiscal cliff,” Boehner said in his statement.
A House leadership announcement said the chamber won’t have any votes until after the Dec. 25 Christmas holiday and will return “when needed.”
© Copyright 2022 Bloomberg News. All rights reserved.