WASHINGTON—A wintery rain fell outside the Capitol Thursday night as lawmakers inside rained on House Speaker John Boehner’s plan to avert the tax hikes and spending cuts scheduled to take effect in less than two weeks.
Speaker Boehner’s plan, dubbed “Plan B,” would have permanently extended all of the George W. Bush-era tax cuts for those earning less than $1 million annually, while allowing taxes to rise to 1990s levels for those earning more than $1 million a year. But, reminiscent of last year’s debt-ceiling negotiations, Boehner’s approach was attacked by both Democrats and Republicans, leading the speaker to withdraw his bill and adjourn Congress until after the Christmas holiday.
Earlier in the evening, the House narrowly passed (215-209) a second part of Boehner’s Plan B that would replace the looming automatic cuts in defense spending. Senate Majority Leader Harry Reid, D-Nev., said the Senate would not consider the measure.
The defeat is viewed as a stinging setback for Boehner, who failed to convince conservatives that permanently extending tax cuts for 99.81 percent of Americans was a preferable option to holding the line on no higher taxes. Boehner said it is now up to Sen. Reid and President Barack Obama to come up with a plan to avoid the so-called “fiscal cliff” and the House would return “when needed.”
As soon as Boehner announced Plan B on Tuesday, the speaker and his aides mobilized to drum up support for the bills. Boehner and his allies were seen lobbying rank-and-file members on the House floor Wednesday, while aides were trying to persuade conservative activists in Washington to back the plan.
Some Republicans made it clear they didn’t like the bill but would vote for it, including former vice presidential candidate Paul Ryan, who said, “We don’t just have a fiscal cliff, we have a fiscal abyss in front of us.” He said every American would pay the price if Congress doesn’t act, a sentiment that was echoed by the U.S. Chamber of Commerce Thursday afternoon: “Maintaining economic growth is an absolute prerequisite to addressing our deficit and debt problems,” the Chamber said in a statement of support for Plan B.
Grover Norquist, author of the no-tax pledge most Republicans have signed, said Boehner’s plan would allow Republicans to keep their promise not to raise taxes—a statement that provided political cover for those who wished to take it. Ultimately, it didn’t do enough to bring the right flank of the party into line: Rep. Jim Jordan, chairman of the powerful 170-member Republican Study Committee, voiced strong opposition to the bill because it allowed some taxes to increase.
The Heritage Foundation, the Family Research Council, Club for Growth, and other conservative groups also campaigned against the plan, urging their supporters to contact their elected representatives. FreedomWorks, the nation’s largest Tea Party group, expressed initial optimism about Plan B before voicing total opposition to it leading up to Thursday’s scheduled vote.
Boehner was left peddling a plan that opponents on both sides of the aisle called “a non-starter.”
In the Senate, reliably anti-tax Republicans such as Sens. Tom Coburn of Oklahoma and Rand Paul of Kentucky were reportedly considering support for the bill due to the limited options for conservatives. But even if Senate Republicans had coalesced around the House plan, Reid said he wouldn’t allow a vote on it. Boehner said passing Plan B in the House would have forced President Obama to convince Senate Democrats to go along, or else “be responsible for the largest tax increase in American history.”
Obama’s most recent offer came Monday, when the White House offered to allow taxes to increase on those earning more than $400,000 annually, in exchange for a two-year increase in the debt ceiling.
Both sides have also repeatedly said it’s time for the other side to “get serious” about negotiations. If lawmakers can’t come to an agreement to stop the automatic spending cuts and tax increases, the Congressional Budget Office predicts the country will sink back into recession in 2013.