Boehner's Fiscal Cliff Plan B Fails. Now What?
It was supposed to be a demonstration of strength. It turned out to be a demonstration of weakness.
When Republican House Majority Leader John Boehner informed the White House that he'd be holding a vote on "Plan B," a bill to extend the Bush tax cuts for all income under $1 million, his goal was not for the plan to become law. It was to put President Obama in a more difficult spot: It would demonstrate Boehner's control over his caucus, pushing through a vote on a tax increase for the highest earners. And it would give Republicans a way to blame Democrats should no deal be reached: Republicans could say they had voted to avert a tax hike on most Americans, and increase tax rates on high incomes — and Democrats had refused to support it.
That was the plan, anyway. But enough of Boehner's colleagues in the House refused to go along that it didn't come together. At the last minute on Thursday night, Boehner canceled the vote. He just didn't have the support he needed. What the top House Republican ended up proving was that he wasn't in control.
What explains the refusal to go along with the GOP Speaker? As far as I can tell, it's pretty straightforward: There were enough House Republicans who really didn't want to vote for any bill that would allow tax rates to rise on anyone, even, and perhaps especially, a bill that wasn't actually intended to become law.
Sounds simple enough, right? But the unique circumstances of the fiscal cliff make it a little more complicated. Now that Plan B has failed, we might well go over the fiscal cliff, thus allowing the Bush tax cuts to expire. That will mean higher tax rates on everyone, at least until Congress inevitably passes a bill to reinstate the Bush tax cuts for everyone below $250,000.
In other words, Republicans were so opposed to casting a strategic vote raising taxes on anyone that they instead pursued a strategy that may have the effect of allowing taxes to go up on everyone, or at least those making more than $250,000.
So what happens now?
Two possibilities remain. One is that we go over the fiscal cliff, and then terms of the fight change permanently: Income taxes go up on everyone, there's no alternative minimum tax (AMT) patch or doc fix, and some of the fiscal cliff spending reductions start to kick in.
What will Republicans do then? At Forbes, Avik Roy suggests that the GOP could bargain from there for a better deal, including some sort of entitlement reform. I'm skeptical. This is, after all, the same GOP that just voted against a strategic tax hike that wasn't going to become law — despite the fact that it might have given them leverage to actually prevent real tax hikes from happening. Once taxes go up, how likely is it that those same Republicans will then refuse to vote for a package that reduces tax rates on earnings under $250,000?
But going over the fiscal cliff is not quite inevitable. Not yet. Boehner can still cut a deal with the White House — and he doesn't even need unified Republican support to do it. If Boehner and Obama agree on a deal, then Boehner can pass it on a bipartisan basis with a large number of votes from House Democrats. And as The Examiner's Philip Klein points out, there's precedent for this approach:
Keep in mind that during last year's fights over the government shutdown and raising the debt ceiling, Boehner wasn't able to unify his members, so he cut a deal with President Obama that passed the House with the help of Democrats. We don't know exactly how many votes Boehner was short tonight, but we do know that he had little margin for error going in — he could only lose 23 Republicans, assuming Democrats held firm. Were Boehner instead to cut a deal with Obama that could attract Democratic support, it would give him a greater cushion. Going back to last year, 59 Republicans voted against the deal to avert the government shutdown and 66 voted against the deal to raise the debt limit — and yet both measures sailed through comfortably with Democratic support.
It was always clear that any deal would be a last-minute deal. That's still the case. Indeed, Boehner may now feel a sense of urgency to make a last minute deal the only way that seems plausible at this point — by going forward with a bill that lots of House Democrats will also support. But part of the question now is whether Boehner actually wants to make a deal that relies heavily on Democratic votes, and which could help cost him his speakership, which is up for a vote at the beginning of next year. Boehner already demonstrated his weakness with Plan B. Is he willing to do it again?
