Sat, Dec 22, 2012 - Page 1 News List

Obama promises to press ahead on fiscal cliff solution

PLAN B:The US House speaker failed to muster support for his proposal because of opposition from anti-tax lawmakers within his own party


US President Barack Obama said he would press ahead with Congress to prevent across-the-board tax increases set to strike taxpayers on Jan. 1 after Republican Party leaders in the House of Representatives unexpectedly put off a vote on legislation calling for higher rates on US$1 million earners.

The measure “did not have sufficient support from our members to pass,” US House Speaker John Boehner conceded in a brief statement when the vote was abruptly scrapped on Thursday evening.

At the White House, press secretary Jay Carney said that Obama’s “main priority is to ensure that taxes don’t go up on 98 percent of Americans and 97 percent of small businesses,” citing statistics associated with Obama’s campaign promise to increase top tax rates on households earning more than US$250,000 a year.

“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,” Carney said.

The statement did not say whether Obama would work to revive stalled talks with Boehner or turn to the Democratic-controlled Senate to try to salvage the situation.

Boehner’s attempt to tactically retreat from a longstanding promise to maintain tax rates dating back to the administration of former US president George W. Bush was designed to gain at least some leverage against Obama and Senate Democrats in the fiscal cliff endgame. Thursday’s drama was a major personal defeat for the speaker, who retains the respect and affection of his Tea Party-infused conference, but sometimes has great difficulty in getting them to follow his leadership.

Boehner’s Plan B was crafted to prevent tax increases set to kick in on Jan. 1 on virtually every taxpayer. However, a provision that would have let rates rise for those at the upper income range — a violation of longstanding Republican orthodoxy — triggered the opposition of anti-tax lawmakers inside the party.

The hope was that successful House action on the measure would force Senate Democrats to respond, but US Senate Majority Leader Harry Reid, a Democrat, made it clear that Plan B would have been dead on arrival in the Senate.

“Speaker Boehner’s plans are non-starters in the Senate,” Reid said.

Boehner announced he would move to Plan B after testing the waters with fellow Republicans regarding a possible pact with Obama on tax hikes of US$1 trillion — including the breakthrough proposal on higher tax rates. He found them not very receptive.

Thursday’s events leave little time for Obama and bruised lawmakers to prevent across-the-board tax increases and deep spending cuts from taking effect in the new year.

The House is not due to meet again until after Christmas, while the Senate was expected to meet briefly yesterday, then not reconvene until Thursday next week.

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