Let's call the whole thing off

I just finished laughing from this spectacle on the House floor today. The House leadership tried desperately to pass “Plan B,” the main part of which was an extension of the Bush tax cuts on the first $1 million of income. In truth, all of the other giveaways in it would actually result in lower taxes for many wealthy earners, but tax rates have this weird power, especially within the Republican caucus. And you could just feel today that conservatives weren’t willing to pass the bill, even at that ridiculously high level. John Boehner and the leadership added a sweetener in the form of a package that eliminated the sequester on defense spending and applied it to more discretionary spending cuts, and even that barely passed, tainted by the association to Plan B.

We waited for a vote. And waited. Then the House Republicans held a closed caucus. And then Boehner had to come out and call the whole thing off.

The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff. The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation’s crippling debt. The Senate must now act.

This is astonishing. Boehner spent three days talking up Plan B, which you just don’t do without the votes in hand. But conservative groups rule the House, and they turned against a bill that gives tax breaks to everyone making up to $1 million, along with enough reductions in other taxes to soften the blow for those poor millionaires. But House Republicans just aren’t going to do it, on this or any tax increase.

This completely changes the dynamic of the talks, in my view. The President is simply not going to be able to win a grand bargain. The House couldn’t even do this simple millionaire’s bracket. There’s no way the President can continue to negotiate with someone who cannot bring the votes of his caucus forward. There is simply no negotiating partner on the other side, which has given way to crazy. It’s an impasse.

This way lies the slope. Going down. And frankly, I don’t see how you can be all that unhappy about it. The reality is that there will be no deal. The White House must recalibrate to that.

David Dayen

David Dayen