OUR THOUGHTS ON:

Does "Doomsday" Mark the End of the Fiscal Cliff Negotiations?

Tax

By Ron Kramer

Last evening, House Speaker John Boehner cancelled his attempt to pass his “Plan B” tax legislation that would extend the Bush-era tax cuts for all taxpayers with incomes up to $1 million annually. Lawmakers then left Washington for the Christmas holidays. At this point, it’s not clear whether lawmakers will even return until 2013. However, Speaker Boehner announced plans to continue negotiations with President Obama over the fate of the so-called fiscal cliff.

Speaker Boehner said the House did not consider the tax measure because there were not sufficient Republican votes to pass it. Many Republican House members are not happy that Speaker Boehner agreed to raise tax rates on any taxpayers, regardless of income. . Boehner then said it’s now up to Senate Majority Leader Harry Reid and the President to come up with a plan to avert the large cuts in domestic and military spending and the expiration of the 2001 and 2003 tax cuts scheduled to hit on January 1.

The latest offer from the White House would limit the relief for Bush-era tax cuts to those making under $400,000, substantially below what Boehner wanted House Republicans to approve.
Earlier in the evening, the House passed the Spending Reduction Bill of 2012 (HR 6684), that would replace the budget sequestration spending cuts enacted under the Budget Control Act of 2011. The spending cut bill passed the Republican controlled House by a vote of only 215 to 209. This slim margin of passage apparently signaled less than full support for Boehner’s Plan B tax legislation.

It looks like the President and the Senate leadership must now step up to avoid the fiscal cliff. Hopefully, since the world survived the Mayan Doomsday, a deal or plan will rise up the save the Doomsday waiting for us at the bottom of the fiscal cliff!

Happy Holidays. 

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