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Republicans to hold vote on fiscal cliff 'Plan B' | Republicans to hold vote on fiscal cliff 'Plan B' |
(about 3 hours later) | |
The Republican-led US House is set to vote on a package of spending cuts and tax rises party leaders say will keep the US away from the "fiscal cliff". | The Republican-led US House is set to vote on a package of spending cuts and tax rises party leaders say will keep the US away from the "fiscal cliff". |
The vote includes tax rises on earnings above $1m (£614,000) on Speaker John Boehner's so-called "Plan B" option. | |
It comes as talks with the White House appear to have stalled, with President Barack Obama seeking a lower threshold. | |
A deal must be reached by 1 January, or a combination of steep tax rises and sharp spending cuts will take effect. | A deal must be reached by 1 January, or a combination of steep tax rises and sharp spending cuts will take effect. |
Analysts in the US and overseas have expressed concern that failure to reach a deal could take the US into recession. | Analysts in the US and overseas have expressed concern that failure to reach a deal could take the US into recession. |
Veto threat | |
A vote is expected by the late afternoon on Thursday, but could stretch on into the evening. | A vote is expected by the late afternoon on Thursday, but could stretch on into the evening. |
House Majority Leader Eric Cantor said on Thursday: "We, as Republicans, have taken concrete actions to avoid the fiscal cliff." | |
He and Mr Boehner say the bill as proposed would ensure permanent tax cuts for 99.8% of Americans. | He and Mr Boehner say the bill as proposed would ensure permanent tax cuts for 99.8% of Americans. |
But Mr Cantor added that Republicans would not be sending their members home for the Christmas recess after the vote - a sign that Congress could be expected to vote on a more bipartisan deal within days. | But Mr Cantor added that Republicans would not be sending their members home for the Christmas recess after the vote - a sign that Congress could be expected to vote on a more bipartisan deal within days. |
Correspondents say the Republican plan has no chance of passing the Democratic-led Senate, and is in effect an effort to tell the US public that they should not be blamed if the US falls over the fiscal cliff. | Correspondents say the Republican plan has no chance of passing the Democratic-led Senate, and is in effect an effort to tell the US public that they should not be blamed if the US falls over the fiscal cliff. |
The White House has threatened to veto the legislation if does pass Congress, saying the bill would mean tax rises on 25 million Americans making under $250,000. | The White House has threatened to veto the legislation if does pass Congress, saying the bill would mean tax rises on 25 million Americans making under $250,000. |
A study by the non-partisan Tax Policy Center found some low-income people would see tax rises because the measure would not renew several tax cuts that were part of the 2009 stimulus package. | A study by the non-partisan Tax Policy Center found some low-income people would see tax rises because the measure would not renew several tax cuts that were part of the 2009 stimulus package. |
On Thursday, the White House criticised Republicans, saying Mr Boehner's response to compromises from the president was "to walk away" from negotiations. | |
Spokesman Jay Carney said the introduction of Mr Boehner's so-called Plan B was a "multi-day exercise in futility at a time when we do not have the luxury of exercises in futility". | |
'Partisan war paint' | 'Partisan war paint' |
Mr Boehner announced the bill on Tuesday, saying he would bring forward a measure that extended Bush-era tax cuts for those earning less than $1m per year - but would not address the automatic spending cuts. | Mr Boehner announced the bill on Tuesday, saying he would bring forward a measure that extended Bush-era tax cuts for those earning less than $1m per year - but would not address the automatic spending cuts. |
Correspondents say the move came as a surprise as negotiations appeared to be making progress. | Correspondents say the move came as a surprise as negotiations appeared to be making progress. |
On Wednesday, the Republican leadership added a companion bill that would replace the automatic cuts with a proposal to remove cuts from defence and government operating budgets. They would be offset by reductions elsewhere in the budget. | On Wednesday, the Republican leadership added a companion bill that would replace the automatic cuts with a proposal to remove cuts from defence and government operating budgets. They would be offset by reductions elsewhere in the budget. |
The proposal would cut food stamps, benefits for federal workers and some social services programmes. | The proposal would cut food stamps, benefits for federal workers and some social services programmes. |
On Wednesday, Mr Obama dismissed the bill, telling reporters that he and Mr Boehner were just a few hundred billion dollars apart on full 10-year deal. | On Wednesday, Mr Obama dismissed the bill, telling reporters that he and Mr Boehner were just a few hundred billion dollars apart on full 10-year deal. |
The president said Republicans should "peel off the partisan war paint" and take his most recent offer. | The president said Republicans should "peel off the partisan war paint" and take his most recent offer. |
Mr Obama is now proposing a tax rise on incomes over $400,000 (£247,000), an increase on the $250,000 level he had originally sought. | Mr Obama is now proposing a tax rise on incomes over $400,000 (£247,000), an increase on the $250,000 level he had originally sought. |
He also offered a change to the way Social Security cost of living adjustments are made for some recipients, cuts from government healthcare programmes and a two-year extension of the debt ceiling. | He also offered a change to the way Social Security cost of living adjustments are made for some recipients, cuts from government healthcare programmes and a two-year extension of the debt ceiling. |
Mr Boehner's office called the proposal "a step in the right direction" but not fully "balanced". | Mr Boehner's office called the proposal "a step in the right direction" but not fully "balanced". |
In a brief news conference on Wednesday, the House Speaker countered that the president will bear responsibility for "the largest tax increase in history" if he does veto the bill. | In a brief news conference on Wednesday, the House Speaker countered that the president will bear responsibility for "the largest tax increase in history" if he does veto the bill. |
But Senate leaders have signalled there is little hope for the measure in Congress' upper-chamber. | But Senate leaders have signalled there is little hope for the measure in Congress' upper-chamber. |
Senate Majority Leader Harry Reid has said the proposal would not pass and that lawmakers would return to Washington next Thursday to continue working on a deal. | Senate Majority Leader Harry Reid has said the proposal would not pass and that lawmakers would return to Washington next Thursday to continue working on a deal. |
Analysts have painted a grim picture of the consequences of going over the cliff, with some warning that the impact could push the US back into recession. | |
The Organization for Economic Co-operation and Development (OECD) said in its latest economic outlook that the recession from the cliff could become global. |