President Barack Obama and House Speaker John Boehner made it clear Wednesday that talks have broken down over how to avoid the fiscal cliff, regressing to political posturing just when it seemed like a deal could be imminent. The showdown centres around Boehner’s decision to call a floor vote Thursday for his so-called “Plan B” bill, which would allow the Bush-era tax cuts to expire only for incomes over $1 million.
The move is a tacit signal that the Republican Speaker is walking away from the concessions offered by Obama, and effectively giving up on passing a comprehensive fiscal cliff deal that includes both revenue increases and spending cuts.
“The president’s offer of $1.3 trillion in revenues and $850 billion in spending reductions fails to meet the test that the president promised the American people – a balanced approach,” Boehner said in dramatic, 50-second “press conference” Wednesday. “Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American – 99.81 per cent of the American people. And then the president will have a decision to make: He can call on Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history.”
The “Plan B” vote is a tactical manoeuvre by Boehner, aimed at forcing Democrats to vote for the bill or risk raising taxes on the vast majority of Americans. According to Republican insiders, the thinking is that by getting the revenue question out of the way, the GOP will have more leverage to negotiate spending cuts and entitlement reforms during the debt ceiling debate next year.
Obama, meanwhile, has promised to veto the “Plan B” bill should it get to his desk. In his dueling press conference Wednesday, he accused Republicans of walking away from an imminent compromise that had included big concessions from the White House, including raising the income tax threshold to $400,000 and changing cost-of-living adjustments for Social Security.
“They keep on finding ways to say no, as opposed to finding ways to say yes,” Obama said. “This is not a situation where I’m unwilling to compromise. This is not a situation where I’m trying to rub their face in anything. I think anybody who looks at this objectively would say that coming off my election, I have met them at least halfway in order to get something done for the country.”
The main question now is whether Boehner can actually get Republican House members to vote for his “Plan B” bill, which would force the party to take the unprecedented move of raising marginal tax rates.
Democrats have united against the bill, so Boehner can only afford to lose about 18 votes on the Republican side. But several fiscal hawks in the GOP caucus have already come out publicly to oppose the “Plan B” option, and two powerful grassroots conservative groups have urged members to vote “No,” so its passage remains uncertain.
The Washington Post reports that GOP leaders fanned out across the House floor this afternoon to cajole members into voting, and that they will meet tonight to decide whether they have the votes, or whether they need to tie the “Plan B” bill to another bill that cuts spending in order to make it more palatable to the party’s rank-and-file.
Needless to say, if the bill doesn’t pass, it will be a total disaster for Boehner. At that point, the only option will be to come up with a compromise that can pass the House with bipartisan support. But with less than two weeks to go until the cliff deadline, it is not clear whether there will be enough time — or good will — to reach a deal.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.