Washington – Speaker’s effort to pass fallback legislation to avert a fiscal crisis in less than two weeks collapsed Thursday night in an embarrassing defeat after conservative Republicans refused to support legislation that would allow taxes to rise on the most affluent households in the country.
House Republican leaders abruptly canceled a vote on the bill after they failed to rally enough votes for passage in an emergency meeting about 8 p.m. Within minutes, dejected Republicans filed out of the basement meeting room and declared there would be no votes to avert theuntil after Christmas. With his “Plan B” all but dead, the speaker was left with the choice to find a new Republican way forward or to try to get a broad deficit reduction deal with that could win passage with Republican and Democratic votes.
What he could not do was blame Democrats for failing to take up legislation he could not even get through his own membership in the House.
“The House did not take up the tax measure today because it did not have sufficient support from our members to pass,” Mr. Boehner said in a statement that said responsibility for a solution now fell to the White House and Senator Harry Reid, Democrat of Nevada, the majority leader. “Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff.”
The stunning turn of events in the House left the status of negotiations to head off a combination of automatic tax increases and significant federal spending cuts in disarray with little time before the start of the new year.
At the White House, the press secretary, Jay Carney, said the defeat should press Mr. Boehner back into talks with Mr. Obama.
“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,” he said.
The refusal of a band of House Republicans to allow income tax rates to rise on incomes over $1 million came after Mr. Obama scored a decisive re-election victory campaigning for higher taxes on incomes over $250,000. Since the November election, the president’s approval ratings have risen, and opinion polls have shown a strong majority not only favoring his tax position, but saying they will blame Republicans for a failure to reach a deficit deal.
With a series of votes on Thursday, the speaker, who faces election for his post in the new Congress next month, had hoped to assemble a Republican path away from the cliff. With a show of Republican unity, he also sought to strengthen his own hand in negotiations with Mr. Obama. The House did narrowly pass legislation to cancel automatic, across-the-board military cuts set to begin next month, and shift them to domestic programs.
But the main component of “Plan B,” a bill to extend expiringfor everyone with incomes under $1 million, could not win enough Republican support to overcome united Democratic opposition. Democrats questioned Mr. Boehner’s ability to deliver any agreement.
“I think this demonstrates that Speaker Boehner has a real challenge,” said Representative Steny H. Hoyer of Maryland, the No. 2 House Democrat. “He hasn’t been able to cut any deal, make any agreement that’s balanced. Even if it’s his own compromise.”
Representative Rick Larsen of Washington accused Republicans of shirking their responsibility by leaving the capital. “The Republicans just picked up their toys and went home,” he said.
Futures contracts on indexes of United States stock listings and shares in Asia fell sharply after Mr. Boehner conceded that his bill lacked the votes to pass.
The point of the Boehner effort was to secure passage of a Republican plan, then demand that the president and the Senate to take up that measure and pass it, putting off the major fights until early next year when Republicans would conceivably have more leverage because of the need to increase the federal. It would also allow Republicans to claim it was Democrats who had caused taxes to rise after the first of the year had no agreement been reached.
That strategy lay in tatters after the Republican implosion.“Some people don’t know how to take yea for an answer,” said Representative Charlie Dent of Pennsylvania, a Republican who supported the measure and was open about his disappointment with his colleagues.
Opponents said they were not about to bend their uncompromising principles on taxes just because Mr. Boehner asked.
“The speaker should be meeting with us to get our views on things rather than just presenting his,” said Representative Justin Amash of Michigan, who recently lost a committee post for routinely crossing the leadership.
Just days before more than a half trillion dollars in tax increases and spending cuts kick in, a chasm now separates Congressional Republicans from the president, even though the latest deficit offers from the White House and speaker are numerically very close. With his own plan defeated, Mr. Boehner faces a grave decision. A deal with Mr. Obama would almost certainly lose a huge swath of his Republican conference, but it could pass with Democratic support. Does he make such a deal and risk a Republican revolt, or do leaders allow the nation to head into an economic situation that some say could cause a recession?
“It has been deeply troubling that Speaker Boehner has spent day after day on the road to nowhere; making it clear Republicans are having trouble governing and only putting us closer to the fiscal cliff,” said Representative Sander M. Levin of Michigan, the senior Democrat on the House Ways and Means Committee. “The speaker needs to now exercise leadership and go back to the negotiating table with the president to find a path forward that is balanced, equitable, and promotes economic growth.”
Senator Rob Portman, Republican of Ohio, was enlisted to press his former House colleagues to vote yes, but even with the failure of that effort, he said there was a way forward.
“Maybe I’m the last optimist standing in this town, but I still think whether it passes or not, there’s still an opportunity for a broader agreement,” he said.
The speaker’s troubles on Thursday seemed to worsen with each hour. The vote to cancel the military cuts, supposed to be the easiest of the night, passed narrowly, 215-209. Even a routine procedural vote to take up the speaker’s tax bill passed by a surprisingly tight tally, 219-197, with 13 Republicans bolting from their leadership to vote “no.” Recalcitrant conservatives were balking on allowing taxes to rise on incomes over $1 million a year.
“I want something that treats everybody fairly. I think everybody needs to be protected, and I don’t think the bill does that,” said Representative Mick Mulvaney, Republican of South Carolina, who opposes Plan B.
The struggle to muster the votes for Plan B played out against a surreal tableau in the Capitol. Senator Daniel K. Inouye, Democrat of Hawaii, who died Monday, was lying in state in the Rotunda. Mr. Boehner spoke briefly with Senator Reid as they watched the somber memorial service for Mr. Inouye in the morning. Then the two men blasted each other hours later. Representative Kevin McCarthy of California, the Republican whip, could be seen bending arms on the House floor.
Stymied, Republican leaders called a recess around 7 p.m. Members streamed in and out of the whip’s office, munched on Chick-fil-A sandwiches (regular and spicy) and professed uncertainty over what comes next.
Democrats — and some Republicans — hoped the demise of the Boehner backup plan will usher in a last and final round of negotiations between the speaker and President Obama over a broad deficit reduction deal that raises more than $1 trillion in taxes over 10 years while locking in another $1 trillion in savings from entitlements likeand other federal programs.
“The math changes” with a bipartisan deal, said Representative Steven C. LaTourette, a retiring Republican moderate from Ohio, who predicted Mr. Boehner could win at least half of House Republicans. “If there’s a negotiated settlement with the president, the speaker will put it on the floor and we’ll see where the chips fall.”