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US House puts off vote on 'Plan B' budget

Republicans cancel crucial Congress vote to push for their plan on tax rises aimed at avoiding year-end "fiscal cliff".
Last Modified: 21 Dec 2012 06:12

The US House of Representatives has scrapped the bill on a Republican plan to avoid a year-end "fiscal cliff" that threatens to send the economy into recession.

The House is now in recess until after Christmas because the Republican majority failed to gather enough votes on Thursday to pass the budget bill of spending cuts and tax rises.

The White House said on Friday that President Barack Obama was willing to continue bargaining for a bipartisan solution to avert the "fiscal cliff".

Obama intended to work with Congress, Jay Carney, the White House spokesman, said after the vote on Republican proposal was cancelled due to lack of enough votes.

The US president wanted a deal signed before the Christmas break.

Speaker John Boehner's "Plan B" was to raise taxes only on annual incomes over $1m, aimed at putting pressure on Obama to offer more concessions.

Boehner's plan would not have raised the amount of revenue that Obama has demanded.

In a brief statement, Boehner said the bill "did not have sufficient support from our members to pass".

He said that now it is up to the president to work with Senate Majority Leader Harry Reid "on legislation to avert the fiscal cliff".

"While the White House slow-walks us all to the edge of the fiscal cliff, Republicans are once again taking action to protect American families, our economy, and our national security," Boehner's office said.

But Obama has vowed to veto the plan, and a senior Democratic aide said the top Democrat in the Senate, Harry Reid, is likely to ignore it instead of taking it as a base to work out a wider compromise.

"What we are doing today is wasting time, pretending and making political points but not moving the ball forward to get to a compromise," senior Democratic House member Steny Hoyer of Maryland told MSNBC.

Republicans complain that Obama has not done enough to promise spending cuts to rein in the deficit and hope Plan B will force him to offer more.

The two sides are also still at odds on taxes. The White House wants taxes to rise on household incomes above $400,000 a year, a concession from Obama's opening proposal for a $250,000 income threshold, while Boehner's plan aims at income over $1m.

In an eleventh hour effort to avoid a potential defeat at the hands of some of his party members over the tax hike, Boehner added separate legislation with spending cuts in an effort to lure more conservatives that the tax hike was worth a risky vote.

Those spending cuts aim to scrap the approximately $55bn in defence program cuts scheduled to begin in January and shift the reductions to other domestic programmes.

Those include less spending for social safety net benefits like food stamps and Medicaid healthcare for the poor. It also targets some funding for Obama's signature healthcare reform law.

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