House GOP Pulls "Plan B" As Fiscal Cliff Looms

By: From CBS News
By: From CBS News

WASHINGTON (CBS NEWS) -- House Speaker John Boehner pulled his "fiscal cliff" backup plan - the so-called "Plan B" bill - tonight after he realized he didn't have enough Republican votes to pass it.

In a written statement, Boehner said: "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."

The revelation that Boehner couldn't muster enough support for "Plan B" virtually confirms what Obama officials told CBS News earlier today: he's short on GOP support for the "fiscal cliff" offer he presented to the president last weekend. The two sides are not that far apart in the "fiscal cliff" negotiations: In their most recent offers, Mr. Obama was offering $1.2 trillion in revenue and $800 billion in spending cuts; Boehner was offering $1 trillion in revenue and $1 trillion in spending cuts.

There were several warning signs of the lack of enthusiasm among House Republicans: Boehner was seen on the House floor Wednesday glad-handling in an effort to win votes, and the decision to hold the vote late in the evening tonight appeared to have been made to ensure there was adequate time to ensure that the bill would pass. Erick Erickson of the conservative RedState blog reported Thursday morning that 34 Republicans planned to vote against the bill and 12 more were considering doing so, more than enough to block passage

The GOP maneuvering looks similar to what took place in the debt ceiling debate last summer, when Boehner worked toward a deal with the president that prompted blowback from his caucus once details started to spill out. At the time, House Republicans passed "Cut, Cap and Balance," which was essentially the "Plan B" of 2011 - it had no chance to pass the Senate or be signed by the president, but it allowed Republicans to say that they had at least put forth a plan.

Boehner's attempts to place blame for a possible tax hike on Democrats is complicated in part by the fact that the Democrat-led Senate has already passed a bill extending the Bush-era tax rates on income under $250,000, a bill Mr. Obama has said he would sign. House Republicans discussed holding a vote on that bill, in an effort to show that it could not pass the House, but ultimately decided against doing so.

With the nation set to go over the "fiscal cliff" in less than two weeks - and Boehner sending members home for Christmas - the path forward for negotiations is unclear. Boehner is not the only one facing a potential revolt from his base: Liberal Democrats have expressed concern over the president's willingness to change the way inflation is calculated in Social Security and other government programs - a shift to the so-called "chained CPI."

But it is Boehner who faces the larger challenge in keeping his side on board: Many House conservatives fear that a vote for a "fiscal cliff" deal could mean a primary challenge from a tea party-backed candidate. Though the Progressive Change Campaign Committee said Thursday that a Democrat who vote for a deal that includes chained CPI is "inviting a primary," most Democrats do not expect a vote for a "fiscal cliff" deal to mean potentially losing their seat.

The only way to reach a deal may be to let the nation go over the "cliff." When that happens, the expiration of the Bush-era tax cuts will mean that taxes on nearly all Americans will go up. That fact would seem to make it easier for House Republicans to back a "fiscal cliff" deal, since they would be voting for a tax cut, not a tax hike.

But going over the "cliff" could have significant consequences. To be clear, the "cliff" is actually more of a slope: The $1.2 trillion in automatic spending cuts are phased in over a decade - it's not the immediate punch to the cut that "cliff" implies - and there are budgetary maneuvers that can at least somewhat soften the blow of both the tax hikes and spending cuts. But going over the "cliff" could spook the markets and once again shake world perceptions of the ability of the U.S. government to function effectively. And if a deal is not reached relatively soon after the deadlilne, the $500 billion in tax hikes and $200 billion in spending cuts in the first year will likely start pushing the nation back into recession.

Meanwhile, the nation is expected to reach the debt ceiling once again around February, an issue that Mr. Obama has hoped to take off the table as part of a "cliff" deal. And going over the "cliff" means more than just an increase in tax rates and the start of spending cuts mandated as part of the 2011 debt limit agreement: It also means the expiration of the payroll tax holiday, a lack of a patch for the Alternative Minimum Tax, no expansion of unemployment insurance, no expansion of the "doc fix" to keep physician reimbursements from falling, and a host of other outcomes.

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