House Republicans' "Plan B" to avert the "fiscal cliff" came crashing down Thursday night after party leaders realized they didn't have the votes to pass it, and pulled it from the floor — leaving the country poised on the edge of massive tax increases and spending cuts.
House lawmakers are now headed home for Christmas, though they vowed to return if there is any progress on talks.
But the collapse is a serious blow to House Speaker John A. Boehner, who had hoped to gain leverage in his negotiations with President Obama, and it signals that conservative Republicans are unwilling to stomach any rise in marginal income-tax rates — even on those making more than $1 million, which was Mr. Boehner's plan.
"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. "Now it is up to the president to work with [Senate Majority Leader Harry Reid, Nevada Democrat] on legislation to avert the fiscal cliff."
But the White House signaled a willingness to move forward together after Mr. Boehner's failure.
"The president's main priority is to ensure that taxes don't go up on 98 percent of Americans and 97 percent of small businesses in just a few short days," said press secretary Jay Carney. "The president will work with Congress to get this done."
On Capitol Hill, though, Democrats said Mr. Boehner wasted a week's worth of negotiating time by trying his Plan B — particularly since Mr. Obama had already threatened to veto the bill and since Mr. Reid, the top Democrat in the upper chamber, had said he wouldn't even bring it to his chamber's floor for a vote.
Both Mr. Boehner and House Majority Leader Eric Cantor had vowed earlier in the day they had the votes to pass their plan, but as the evening dragged on they halted floor action to huddle with their caucus and see where support was.
Some Republicans had argued for the deal.
"A lifeguard who sees 10 swimmers drowning off his beach, if he can only save nine of them, that doesn't mean he's drowned the 10th one," Rep. Tom McClintock, California Republican, said on the floor. "Let's save who we can."
But too many others said they couldn't vote for any tax-rate increases, and that forced Mr. Boehner to concede.
Emerging from the meeting, rank-and-file lawmakers said Mr. Boehner told them he will call Mr. Obama and try to work something out. But publicly Mr. Boehner was defiant, saying that the House has already passed bills earlier this year to avert tax increases and spending cuts.
Democrats, though, countered that they've also passed a bill through the Senate that extended tax cuts for all but those making $250,000 or more, and insisted Mr. Boehner should vote on that.
"Until you pass the 250,000, we are not going to do anything," Mr. Reid said.
The tax increases, scheduled to take effect Jan. 1, are the result of the expiration of Bush-era income tax cuts and several Obama tax cuts passed in 2009 and 2010. The $110 billion in spending cuts, slated to go into effect Jan. 2, are the legacy of last year's debt-ceiling deal.
The Congressional Budget Office has said that if both of those actions happen, they will plunge the country into a short, sharp recession, but the result would also dramatically lower the deficit and the economy would recover to come back even stronger in the long run.
But all sides in Congress say they are intent on stopping the cuts and tax increases anyway, fearing that immediate economic damage.
Mr. Boehner and Mr. Obama had both made concessions in their negotiations.
The president has agreed to raise his threshold for tax-rate increases to those making $400,000 or more — up from the $250,000 level he had campaigned on. He also has agreed to change the measure of inflation used to calculate benefits such as Social Security, which would save tens of billions of dollars over the next decade.
For his part, Mr. Boehner had said he would accept tax increases on those making more than $1 million, but he wants deeper spending cuts. He had also rejected Mr. Obama's call for another round of stimulus spending to be part of a deal.
Democrats say the two sides are close, but Republicans say they've seen no real movement from the White House, and that's why they went to their Plan B — the combination of their tax plan and spending cuts.
The first part of Plan B succeeded. Mr. Boehner had his chamber pass a Republican plan to avert the $110 billion in defense- and domestic-spending reductions by substituting cuts to Mr. Obama's health care law. It passed 215-209.
If Mr. Boehner had won the tax-increase vote it would have created an opening for him with Mr. Obama. Most of his conservatives would have gone on record supporting a tax-rate increase. Once they had conceded that principle, he could have argued it's just a matter of which dollar threshold to use.
But with conservative interest groups providing pressure, Mr. Boehner and his team couldn't round up the votes — despite support from the U.S. Chamber of Commerce, the National Federation of Independent Business and Americans for Tax Reform, which administers an influential no-new-taxes pledge.
With less than two weeks before the fiscal cliff, even the schedule has become contentious.
Early Thursday, Mr. Reid said he'd send senators home for Christmas later Thursday, and that he won't bring them back until Dec. 27. Mr. Cantor had said he'd keep House lawmakers here to try to work on a deal.
Instead, it was the House that fled town early and senators who stuck around, planning votes Friday on both a defense-policy bill and an emergency spending bill for Hurricane Sandy relief.
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