House Speaker Boehner Abandons Vote on Bush Tax Cut Extension Bill

Facing a lack of support among GOP lawmakers, House Speaker John Boehner, R-Ohio, cut short his attempt to pass legislation that would have extended the Bush-era tax cuts for taxpayers with incomes up to $1 million annually. Republican lawmakers emerged from a party caucus late on December 20 and told reporters that Boehner had cancelled the vote and sent lawmakers home for the Christmas holidays. House Armed Services Chairman Rep. Buck McKeon, R-Calif., said lawmakers might not even return until after the new year, and that Boehner plans to continue negotiations with President Obama over the fate of the so-called fiscal cliff.

In a statement released to the press, Boehner said the House did not consider the tax measure because there were not sufficient votes to pass it. He said Senate Majority Leader Harry Reid, D-Nev., and the president would have to come up with a plan to avert the pending cuts in domestic and military spending and the expiration of the 2001 and 2003 tax cuts scheduled for January.

Rep. Steven C. LaTourette, R-Ohio, told reporters that the vote to pass HJRes 66 would have been in vain since Senate Democrats refused to consider the legislation and the White House threatened to veto it. Boehner dubbed the measure “Plan B” because he and President Obama failed to agree on the size of tax increases and spending cuts. 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. However, the vote on Boehner’s bill would have put GOP lawmakers on record as supporting a tax increase, something they have pledged not to do.

The House did pass a targeted spending cut measure, the Spending Reduction Bill of 2012 (HR 6684 ), that would replace the budget sequestration spending cuts enacted under the Budget Control Act of 2011 (P.L. 112-25 ). The spending cut bill, which passed by a vote of 215 to 209, is very similar to the Sequester Replacement Reconciliation Act of 2012 (HR 5652 ) that passed in May.

In a press conference earlier during the day, Boehner told reporters that he was not assured that the Senate would ignore House passage of the tax relief bill. In addition, Boehner said he planned to continue working with the president to reach a deal in the coming days. The House and Senate are expected to recess from December 21 until December 27 for the Christmas holiday and the observance of the funeral of the late Sen. Daniel Inouye, D-Hawaii.

Neither of the GOP bills gained much support from Democratic lawmakers. House Minority Leader Nancy Pelosi, D-Calif., said Republican lawmakers do not have the proper motivation to reach a solution to the pending cuts in domestic and defense spending. She said a stock market crash in reaction to the stalled fiscal cliff negotiations between President Obama and Boehner would be unthinkable. She called the GOP spending cut bill a “warmed-over stew from last May that’s gotten very stale and very nasty to children and other living things.”

Senate Democrats went on the offensive all day long, urging Boehner to sit down with the president and resume negotiations. “It’s time for the speaker to wake up to the simple reality that to deal with this national crisis, we have to deal with it on a bipartisan basis. It means that he has to sit down with the president and work out an agreement, not with the tea party Republicans in his caucus,” said Senate Majority Whip Richard Durbin, D-Ill.

Senate Majority Leader Harry Reid, D-Nev., reiterated that Democrats would hold out until the House accepts their demand that tax cuts remain extended only for the middle class. “We’re saying until you pass the 250,000 [dollars], we are not going to do anything,” said Reid.

Senate Democratic Policy Chairman Charles E. Schumer, D-N.Y., also clarified that the Senate would not address Boehner’s Plan B in any shape, although it could be subject to Senate amendments. “I believe Speaker Boehner’s a deal-maker at heart. I think he yearns for agreement. So, instead of ping-ponging bills between the two chambers, we’d say to Speaker Boehner, get over to the Oval Office, go there and work together with the president for the good of the country,” said Schumer.

Harsher words came from White House Spokesperson Jay Carney, who said during the White House daily briefing that “Plan B, which is the only thing the House of Representatives—the Republicans in the House are focused on right now, is a multiday exercise in futility at a time when we do not have the luxury of exercises in futility.” Carney said that, if Republicans were looking for a true backup plan, they should take-up the Senate-passed bill extending the Bush-era tax cuts for incomes up to $250,000. “If you’re the House Republicans and you simply have no capacity to reach a compromise on a big deal, there is a fall-back that has been languishing in the House of Representatives that would extend tax cuts to 98 percent of the American people, and has been languishing there for months and months, would give tax cuts to everyone making under $250,000.”

Reid declared that time is running out as many senators are planning to fly to Hawaii for the weekend to attend Sen. Inouye’s funeral. He announced that the Senate will return on December 27 to complete their work for the year and hopefully vote on a fiscal cliff deal brokered between the speaker and the president.

By Jeff Carlson and Stephen K. Cooper, CCH News Staff

Spending Reduction Act of 2012, HR 6684

CBO Cost Estimate of HR 6684, the Spending Reduction Act of 2012

Ways and Means Press Release: House Republicans Re-Introduce Massive Benefit Cuts for Millions of Americans

Ways and Means Press Release: Levin Floor Statement on Republican Plan B

Statement of Administration Policy on HR 6684, Spending Reduction Act of 2012

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

All stories by: Wolters Kluwer Tax and Accounting