News / USA

Congress Adjourns for Christmas Without Path Forward to Avert Fiscal Cliff

Boehner's Plan B Backfires, Fiscal Cliff Threat Loomsi
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Mil Arcega
December 22, 2012 1:23 AM
With the clock ticking towards a year-end deadline, the United States veered closer to stepping off the so-called "fiscal cliff" after Republicans postponed a House vote on an alternate plan to prevent taxes from rising for most Americans. Democrats say President Barack Obama would have vetoed the plan. But with Congressional leaders on holiday recess, the political stalemate is making people nervous. Mil Arcega has more for VOA.

Mil Arcega video report on Wall Street and Fiscal Cliff

Cindy Saine
— U.S. lawmakers are heading home for the Christmas holidays without any agreement or even a clear path forward on a way to avoid a combination of massive tax increases and spending cuts known as the fiscal cliff.  The entire process came to a standstill late Thursday, when the Speaker of the House of Representatives, John Boehner, was unable to muster enough votes in his own Republican caucus for a bill that would only have raised taxes on incomes of $1 million a year. 

After suffering what most analysts viewed as a humiliating setback to his leadership Thursday, House Speaker Boehner sought to push responsibility onto the president and the Senate, even though the House of Representatives would also have to vote to approve any compromise agreement on taxes and spending.

"So unless the president and Congress take action, tax rates will go up on every American taxpayer, and devastating defense cuts will go into effect in 10 days," he said.


What is the U.S. Fiscal Cliff?

  • An agreement intended to force politicians to compromise and make deals.
  • Without a deal by January 1, 2013, sharp spending cuts would hit military and social programs.
  • Tax hikes also would go into effect.
  • The combination would reduce economic activity, and could boost unemployment and push the nation back into recession.
Crisis negotiations between Boehner and Democratic President Barack Obama were abruptly suspended earlier this week, and Boehner had planned to hold a vote on his own tax plan, "Plan B." 

But he conceded that there are some members of his Republican caucus who do not want to be viewed as raising taxes on anyone at all, so he pulled the vote because the bill would not have passed.  The vote was seen as symbolic because the Democratic-led Senate would not have even taken it up for debate.

Senate Majority Leader Harry Reid said that Boehner had taken a "battering" by his own caucus, and that he should not try to blame the president or congressional Democrats.

"To blame us for that travesty that took place over there, Mr. President, that is pretty incredible," he said.

Reid called on Boehner to reach across the aisle and let the House vote on a measure Democrats could accept, the president's plan to raise taxes on annual incomes of $400,000 or higher.

"What he should do is allow a vote in the House of Representatives on a bipartisan bill, it will pass," he said.

Democratic House Minority Leader Nancy Pelosi said her caucus members are willing to work with the Speaker and the president to prevent potential damage to middle class families and the U.S. economy if the crisis is not resolved.

"There is very little time left, but there is still a chance," she said.  "There is still a chance to reach an agreement that is balanced and that is fair."

Some economists say unless action is taken, the U.S. economy could be plunged back into recession.  Martin Feldstein is a professor of economics at Harvard University, and he warned of the impact of the so-called sequester, across the board cuts to government spending that would also hit defense spending.

"Well, one of the things that happens if we go over the cliff is another very substantial reduction in the defense budget, about $50 billion a year, or about 10 percent reduction in the defense budget," he said.  "It is not clear exactly how that would effect different tasks, security forces, but it would obviously weaken our ability to play the role in Asia and elsewhere that we are accustomed to."

The fiscal cliff measures are set to take effect January 1, and the newly-elected Congress is scheduled to be sworn in January 3.

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by: Solopilot from: up in the sky
December 21, 2012 3:01 PM
"The House passed a bill in August that would extend all current tax cuts." The House GOP did their job back in August.

"Senate Democrats have already passed a bill that raises taxes on income higher than $250,000." The Democrats in ths Senate did what the President told them to do.

Missing from the article is what President Obama did, which was re-resubmit his proposed budget. A proposed budget so grossly overbloated with tax increases AND spending increases that, NO Republicans OR Democrats voted for it - TWICE! It would appear that the President is responsible for "going over the fiscal cliff", but doing so may be the ONLY way that spending cuts can be made - in light of the, "social welfare programs that Democrats strongly defend".


by: APasserBy from: Earth
December 21, 2012 2:58 PM
Boehner states: "We see a situation where because of the political divide in the country, because of the divide here in Washington, trying to bridge these differences has been difficult."

Ummm, did he miss the election results or something? Wasn't it clear what Americans as a whole wanted? He's acting and speaking as if the Democrats didn't overwhelmingly win the election. I pity my American neighbors.

In Response

by: Bill from: Mi
December 21, 2012 7:24 PM
On the positive side, it looks like Boehner has committed political suicide? So, at least we have that much.


by: yaaa from: tx
December 21, 2012 2:47 PM
The truth is it is not up to Obama- it is up to Boehner because to become law it must pass the House- Boehner now has to swallow hard and work with Peloci and the bill will not look anything like Plan B.
There will be enough Republicans combined with Democrats to pass a compromise acceptable to the middle in both parties -in the House- but it will not be a Republican bill.

Either way Boehner is toast and one way (no compromise) the Republicans will be toast in 2014.

When lawmakers start representing all of America instead of who gives them money- we will all be better off. Campaign finance reform by Constitutional Amendment!

In Response

by: rgw46 from: usa
December 21, 2012 6:18 PM
should be flat tax..NO other for anyone..no more fees and BS taxs to companies..they all pass down to consumer anyway..but these career politicians do not care..they stll get paid/healthcare/retirement from OUR tax money,,

In Response

by: GotFiddle from: San Diego
December 21, 2012 3:15 PM
You voted for it: you own it. Whatever THEY do, you elected them. It's yours baby. Next time THINK when you vote. Next time you'll be a lot poorer even skinnier. Give THAT some thought.


by: Peter Frohwein from: Mary Esther, Florida USA
December 21, 2012 2:40 PM
Last time I check it was Mr. Boehner's move ?

The President made an offer, Mr. Boehner made a counter offer,
The President made a counter offer..............then nothing from Mr. Doehner ? Plan B never made it passed conception and was DOA. Plan B was NOT a counter offer........Mr. Boehner it is YOUR move.


by: Anibal from: rocky hill ct
December 21, 2012 2:38 PM
Not my problem , pass the buck.....lol. We pay these clowns?

In Response

by: Gotfiddle from: San Diego
December 21, 2012 3:17 PM
YOU also voted for these clowns .. not just Boehner. Hedid nto engineer the cliff Obama did (and now he realizes what he's done but even now THEY could repeal the whole thing but they will not) You voted for it: live it.


by: reubenr from: North East
December 21, 2012 2:30 PM
Dear Mommy,

Please help me. I'm sinking faster than a stone. I've made a fool of myself. You were right, but I'm still not going to make a deal with Barry. I hate him. I just want you to make every thing all right and to make them stop making fun of me.


by: Cranksy from: USA
December 21, 2012 1:22 PM
The Mayan calendar may not foretell an apocalypse, but the Republicans seem hell-bent to set back a recovering economy because of their fealty to their sponsors, the wealthiest Americans, and their sociopathic response to America's minimally compassion social programs.

In Response

by: reubenr from: North East
December 21, 2012 2:48 PM
The Republicans will be putting out their own calendar, soon!


by: David30303 from: Atlanta
December 21, 2012 7:11 AM
"kick-the-can"'s going to be more creative this year.
Too bad even by going over the "cliff" we'll still spend more than we take in.
Thanks Repubi-Crats


by: Anonymous
December 21, 2012 6:53 AM
why don't they stop paying those responsible for this vote until they can make up their minds as to which direction they want this country to go? Up or down?

In Response

by: Bob77021 from: Right Here
December 21, 2012 9:25 AM
Most of the congress are millionaires...do you really think that not paying them a few thousand dollars is going to make them act any differently?

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