Fiscal Cliff

House Speaker John Boehner pulled the second of his "Plan B" measures due to "lack of support of our members to pass [it]," he said in a statement issued this evening.

"Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff," the Speaker wrote.

Members were expected to begin debate on H J Res 66, the Permanent Tax Relief for Families and Small Business Act, after passing the Spending Reduction bill. Instead, the Speaker called a meeting to assess support for his measure and then unexpectedly ended the session. However, members have returned to work on unfinished business.

Plan B was supposed to have been John Boehner’s masterstroke — and the only legislative tactic protecting him from an embarrassing defeat in fiscal cliff negotiations with President Obama.

But late Thursday, after a brief but contentious meeting with his conference, he announced he’d gambled and lost.

“The House did not take up the tax measure today because it did not have sufficient support from our members to pass. 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 January 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.”

His statement leaves him little room for further negotiations with Democratic leaders, and presumes to leave responsibility for avoiding the fiscal cliff in their hands. But despite addressing Harry Reid and Obama so combatively, Boehner’s antics this week have weakened his position in budget negotiations and constitute the most tumultuous moment of his rocky speakership.

Plan B was originally conceived as a full, clean extension of the Bush tax cuts for all income up to $1 million — an attempt to extract further tax and spending concessions from President Obama by eliminating the public perception that Republicans were prepared to take the country over the fiscal cliff to protect millionaires and billionaires from higher taxes.

But the fatal conceit of Plan B was Boehner’s expectation that 218 members of his restive conference would vote to effectively increase taxes on the wealthy, even incrementally, for any reason — let alone as a symbolic exercise meant to grease what they view as a misguided effort to cut a budget deal with President Obama.

His problems began to mount late Wednesday, when it became clear that conservative members would not support the plan without changes. To cajole them, he promised to twin plan B with a vote on separate legislation to cut spending from programs for the poor, meant to defer defense and domestic spending cuts set to take effect early next year.

It wasn’t nearly enough enticement. House Republicans were happy to vote for safety net cuts, but that had no bearing on their willingness to vote for an unconnected tax increase on high earners.

So what happens now?

Boehner has two problems: one with President Obama and another with his conference. And to the extent that he meliorates one he exacerbates the other. He can return to fiscal cliff negotiations with an empowered Obama, and try to eke out the sort of deal he just rejected, then pass it through the House next week, on a bipartisan basis at but a huge risk to his Speakership.

That’s the course he told members he’d pursue in the conference meeting Thursday night.

And the White House is open to it. “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,” said Press Secretary Jay Carney. “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.”

It sets up a scenario where Boehner’s old nemesis Nancy Pelosi is suddenly back in the driver’s seat, controlling the votes necessary to pass a deal.

But if a last ditch effort fails, or he chooses to rebuff Obama, he’ll set one of two unpredictable chains of events into motion.

He can still bring Senate-passed legislation to the floor, which would lock in the Bush tax cuts for income up to $250,000. That bill would face stiff resistance from many corners of his conference, but would likely pass with overwhelming Democratic support. it would leave unresolved issues like the sequester, Medicare physician reimbursement, expiring emergency unemployment benefits, annual appropriations, and the debt ceiling. And it would still leave him wounded leader, in a tough spot with his members.

Or he could turn toward the cliff, take the country over, try to breathe life back into his speakership, and grapple with the messy consequences next year.
TPM

“The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff,” Boehner said in a statement. “The House has already passed legislation to stop all of the January 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.”

Boehner called a last-minute Republican Conference meeting at 7:45 p.m. on Thursday, and by 8 p.m., the conference had broken. Some lawmakers were only just arriving when the meeting broke up. Republicans afterward said that the mood in the room was somber and the news was met with disbelief.

Boehner led the Pledge of Allegiance and a prayer, then simply said that there were not enough votes to pass the bill, there would be no further votes before Christmas and that he would give a statement to the press on Friday. A few lawmakers clapped in appreciation. Others were surprised.

“Anytime that they call a meeting like this, there’s something that’s out of the ordinary,” Rep. Scott Rigell, R-Va., said. “So I knew that they were having trouble with the vote count, but I had just assumed that they’d be in here, to say, ‘Look, rally, let’s go.’ But that did not happen, of course.”

Boehner exited the Capitol at 8:04 p.m. Swarmed by reporters as he swiftly walked through the doors, he said nothing.

Rep. Steven C. LaTourette, R-Ohio, said Boehner told him that he would call Obama to see about the way forward. But it is clear that his negotiating leverage is tarnished and Republicans may inevitably have to swallow a fiscal cliff deal that heavily skews toward the president’s demands.

“It weakens the entire Republican Party, the Republican majority. It’s the continuing dumbing-down of the Republican Party and we are going to be seen more and more as a bunch of extremists that can’t even get a majority of our own people to support policies that we’re putting forward,” LaTourette said.Roll Call

Inside the meeting, which started at 7:45 p.m., Boehner led the conference in the pledge of allegiance and then the serenity prayer and said they were going to have a short conference.

"Then he said we're not going to be here until after Christmas and maybe we don't come back at all this year, and I hope you all have a merry Christmas," said Rep. Steven LaTourette of Ohio.

Boehner did not indicate how many votes he fell short of passing the bill, nor was there any attempt to twist people’s arms, said Rep. Joe Barton of Texas.

Another member inside the room said the speaker told them: "The fate of this country shouldn't be left up to two men negotiating in a locked room."

Boehner tossed the fiscal cliff football to the White House and Senate Majority Leader Harry Reid. The House has done its job, he argued in a familiar refrain.

"The House has already passed legislation to stop all of the January 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," Boehner said.

LaTourette, though, saw the situation differently and added that this wasn’t just a blow to the negotiations over taxes and spending but a mark on the party itself.

“It’s the continuing dumbing down of the Republican Party, and we are going to be seen, more and more, as a bunch of extremists that can’t even get the majority of our own people to support the policies we’re putting forward,” he said. “If you’re not a governing majority, you’re not going to be a majority very long.”

Members sat stunned by the speaker’s admission, unsure of what it meant for the fiscal cliff negotiations. The speaker pledged to call the president, said one attendee, but few members had high hopes House Republicans could cut a deal or pass legislation.

“Well, I don’t know that there is a next step. We’re not coming back until after Christmas and maybe never,” said LaTourette, who's retiring.National Journal

President Obama had vowed to veto “Plan B,” arguing that it would not raise enough revenue. After House Speaker John Boehner pulled the measure Thursday night because he couldn’t generate support among fellow Republicans, the White House press secretary issued this statement:

“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.”
Washington Post

it’s not looking good as the country careens toward the cliff.

But if politics is part theater – and God knows there’s been plenty of choreographed drama this week – then the House vote tonight marks the end of Act II with the all-important third act climax to come. There is still plenty of time, and opportunity, for Boehner and Obama to strike a deal.

Here’s why.

At first blush, Boehner’s decision to step away from the negotiating table to pass his own fiscal cliff solution seemed to give the White House talks short shrift. Frustrated with the maneuver, Democrats have scolded the speaker for wasting a week of negotiating time.
But behind the rhetoric there was a strategy at play. The plan appeared designed to move Obama toward the speaker’s position of smaller tax increases and larger spending cuts while helping conservatives wrap their heads around the idea of voting for a tax hike.

The speaker struggled to round up GOP votes for a package that only would have raised taxes on millionaires. If Boehner had trouble selling his own package, it sends a message to Obama that his position, raising taxes on people who make over $400,000, is going to be even tougher to pass.

Amid rank-and-file House Republicans, there was growing opposition to the Boehner-Obama talks. If that feeling was allowed to fester, Boehner feared he would not be able to muster enough support for an eventual deal with Obama. Thursday’s vote was supposed to ensure that conservatives would have their fingerprints on any final result by bringing them into the deal-making process.

Though Boehner couldn't get his caucus on record supporting a tax hike, his voter counters now have a much better idea of how many Republicans could get behind that approach.

That's important because if Obama and Boehner strike a deal, he won't need to deliver all the votes himself. An Obama-blessed package will win support from House Democrats, who opposed Plan B. Most Republican insiders believe Boehner only has to deliver about half his members to keep his speakership.

And even before Thursday's scuttled vote, Republican House Rules Committee Chairman David Dreier signaled that GOP leadership understood that Boehner's talks with the president were far from over.

“The president’s in the midst of negotiations,” he said. “There is clear recognition this is not going to be the final package that we’re going have. I don’t think anyone has come to that conclusion.”
Obama echoed Dreier in a statement it released tonight vowing to "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 failed vote creates space for Boehner and Obama to restart negotiations. Both the House and Senate aren't expected to take any more action on the cliff until after Christmas.

With lawmakers back home and the nation tuned out for the holidays, Obama and Boehner could resume talks in a much less frenzied environment. In fact, some of the biggest breakthroughs in the negotiations so far have come after lawmakers have left town. Just last Friday, for example, Boehner offered to raise tax rates on millionaires.

As then-Republican Senate Majority Leader Trent Lott used to say, the best time to cut a deal is when the Capitol is empty.

Despite all the overheated rhetoric, Obama and Boehner aren’t that far apart on the actual numbers. On the question of how much new revenue the government should bring in through higher taxes, the two are separated by $200 billion in a multi-trillion dollar deal. On spending cuts, the two are again only $200 billion apart, not an unbridgeable gulf.

The path to a deal remains. The only question is whether the speaker and the president can walk down it together. National Journal

“Conservatives won a huge battle tonight. Speaker Boehner can't get away with his reckless political ploys anymore at the expense of our principles,” said Meyer. “His speakership is on the ropes, and the harder he pushes, the less likely he'll be speaker come January.”

a day and a half of intense lobbying on the part of the GOP leaders, rank-and-file members were stunned to learn that Boehner's team was giving up the fight.

"I've never seen anything like it where leadership just completely backed down. I guess they made an assessment that the people who were no votes were entrenched no votes, because otherwise I think they would have just pulled it and they would have worked it longer,” Colorado Rep. Mike Coffman (R) told The Hill.

Coffman called the meeting “awful." "It's the first time I've ever seen leadership retreat. It was a real shock - the Speaker looked shocked,” he said.

A separate lawmaker said that Rep. Mike Kelly (R-Pa.), a former Notre Dame football player, got up to make a rousing speech encouraging the leadership to keep twisting arms to get the votes needed for passage.

"No it's not over ... Whip! Tell me how short we are in votes," the lawmaker told The Hill, describing Kelly's remarks.

After House Majority Whip Kevin McCarthy said "too short," Kelly "gives his impassioned speech, this incredible speech about how when he was a kid he had a list of everything he wanted for Christmas and he didn't get everything but he was happy with what he got,” the lawmaker said.

Still, leaders wouldn’t budge.

People were saying "take the count again, but the leadership just wouldn't. ... [T]hey never shared with us what the vote count was. They gave scant detail - they didn't say why the conference was divided ... nothing,” the member said.
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I think it signified just how polarized the House Rs are and that the ideologically pure tea partiers would just as soon see our credit ratings dropped again than be complicit in raising revenues through tax increases.