House Speaker John A. Boehner (R-Ohio) sought to shift responsibility Friday to President Obama and the Democratic-controlled Senate to reach an agreement to avert a series of spending cuts and tax hikes after his fellow Republicans delivered a stunning rebuke to Boehner’s own plan to raise taxes on those making more than $1 million.
In a Friday morning news conference about 14 hours after he abruptly canceled a vote on his proposal, known as “Plan B,” Boehner vowed to continue negotiating with the White House to avert the “fiscal cliff.” He said his plan failed because many of his fellow Republicans simply did not want to be perceived to be raising any taxes.
Boehner said he continues to favor a grand bargain with the president that would set the stage for a dramatic overhaul of the tax code and significant changes in federal entitlement programs. “How we get there, God only knows,” he said.
But Boehner noted that the House has already passed a bill embodying the Republican position that all Americans should be spared a tax increase in January. He said it was now the Senate’s turn to act. “I don’t want taxes to go up, Republicans don’t want taxes to go up,” Boehner said. “But we only run the House. Democrats continue to run Washington.”
The speaker stood before microphones Friday with House Majority Leader Eric Cantor (R-Va.), a sign that the House GOP leadership team remains intact and united behind reaching a deal. Asked whether he should be concerned about his leadership of the House, Boehner flatly insisted: “No.”
“I’ve told my colleagues, if you do the right things every day for the right reasons, the right things will happen,” Boehner said. “And while we might not have been able to get the votes last night to avert 99.81 percent of the tax increases, I don’t think — they weren’t taking that out on me. They were dealing with the perception that somebody might accuse them of raising taxes.”
Boehner also made clear that they will call back their colleagues with 48 hours notice if a deal is imminent. “We’re prepared to come back if needed,” he said.
Before Boehner spoke, U.S. stock prices declined sharply Friday morning, reflecting concerns that the failure of Boehner’s plan has thrown efforts to avoid the year-end “fiscal cliff” into doubt. After 15 minutes of trading, the Dow Jones industrial average was down 116 points, or 0.9 percent, to 13,195, while the Standard & Poor’s 500 index was down 14.68, or 1 percent, to 1,429.
Many investors have been expecting a timely resolution of the fiscal cliff, and markets could be highly volatile as the Jan. 1 deadline approaches. Foreign market also declined overnight, with European shares down about 0.75 percent and Japanese stocks falling 1 percent.
Boehner abruptly shuttered the House for the holidays Thursday night after failing to win support from his fellow Republicans for his proposal. Plan B — Boehner’s alternative to negotiating a broader package with Obama — would have protected the vast majority of Americans from significant tax increases set to take effect automatically next year. But because it also would have permitted tax rates to rise for a few hundred thousand wealthy families, conservatives balked, leaving Boehner humiliated and his negotiating power immeasurably weakened.
If Obama and Congress fail to reach a deal to avoid the fiscal cliff, many Americans would feel the pain, with less money in their paychecks in the first week of the New Year. In the second week of January, about 2 million jobless Americans who have been relying on federal unemployment insurance would stop receiving checks. By around the middle of the month, hundreds of thousands of doctors who accept Medicare, the health-insurance program for the elderly, would see their reimbursement rates automatically slashed by about 30 percent.