HOUSE of Representatives Speaker John Boehner said yesterday that congressional leaders and President Barack Obama must try to move on from Republicans’ failed tax plan and work together to prevent America falling off the looming “fiscal cliff.”
Mr Boehner, the leading Republican in Congress, was unrepentant after the startling failure of his “Plan B” option, a development that raised doubts about his own tenure and left negotiations in disarray.
The failure cast fresh uncertainty over talks to avoid roughly $600 billion (£372bn)in across-the-board tax rises and automatic government spending cuts due to begin in January that could push the US economy back into recession next year.
It was “not the outcome I wanted,” Mr Boehner said after he was unable to win enough Republican support in the House for a plan that would have limited income-tax increases to only the very wealthiest of the US population – those earning $1 million (£600,000) and more each year.
Mr Boehner is Mr Obama’s chief negotiating partner in talks seeking a bipartisan solution to the “fiscal cliff”. He said he was not concerned that Thursday’s withdrawn vote threatened his position as speaker. But he did not outline a clear path forward on negotiations. He had earlier failed to control restless fellow Republicans in the house who adamantly oppose raising taxes for anyone. And they delivered a stinging rebuke to Mr Boehner by refusing to back his “Plan B” approach.
Mr Boehner said a divided Washington must come together to revamp the massive American tax regime in a way that helped to spur economic growth. “How we get there, God only knows,” he said.
Stocks dropped sharply at the open of trading, one day after Mr Boehner’s bill was shelved.
Investors have been increasingly optimistic that a deal would be worked out before the end of the year, but the news Plan B had failed sapped confidence. Mr Boehner had hoped to use the option to win key concessions from Mr Obama.
He abruptly withdrew the draft legislation late on Thursday. House members, heading to their home states for the holidays, were instructed to be available on 48 hours notice if necessary if a vote on a deal had been called.
Mr Obama has said he still plans to work with Congress and was hopeful for a bipartisan solution, his press secretary said in a statement.
The House is controlled by Republicans and the Senate by Mr Obama’s fellow Democrats.