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US House vote on fiscal cliff 'Plan B' cancelled US House vote on fiscal cliff 'Plan B' cancelled
(44 minutes later)
US Republicans have cancelled a Congress vote on tax rises they hoped would help to avert the so-called fiscal cliff. US Republicans have cancelled a vote in Congress on tax rises they hoped would help to avert a so-called fiscal cliff.
They pulled the vote after failing to get enough support for the bill, labelled "Plan B", which would raise taxes on earnings above $1m (£614,000).They pulled the vote after failing to get enough support for the bill, labelled "Plan B", which would raise taxes on earnings above $1m (£614,000).
Earlier, another bill that cut domestic spending narrowly passed by 215 to 209. Republican leaders have said the Senate must now act, as the House of Representatives adjourns for Christmas.
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.
The pair of votes come as talks with the White House appear to have stalled.
President Barack Obama had also sought tax rises for the wealthy, but was pushing for a lower threshold of $400,000.
Veto threatVeto threat
The first bill, seeking domestic cuts but protecting the defence budget, passed the House by a narrow margin. House Speaker John Boehner said on Thursday evening he was unable to garner sufficient votes to secure passage of the second bill, which would have ensured a permanent tax cut for 99.8% of Americans.
But correspondents say that Republican leaders were unable to garner sufficient votes to secure passage of the second bill and put off the second vote. He said in a statement that the bill "did not have sufficient support from our members to pass".
House Speaker John Boehner said in a statement that the bill "did not have sufficient support from our members to pass". But on Thursday, the House did narrowly pass a companion bill that would cut domestic spending while protecting the defence budget.
Earlier on Thursday, House Majority Leader Eric Cantor said on Thursday: "We, as Republicans, have taken concrete actions to avoid the fiscal cliff."
He and Mr Boehner said the bill put forward would have ensured 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.
Correspondents say the Republican plan would have had no chance of passing the Democratic-led Senate, and was 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 would have had no chance of passing the Democratic-led Senate, and was 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 had threatened to veto the legislation if had passed Congress, saying the bill would mean tax rises on 25 million Americans making under $250,000. The White House had threatened to veto the legislation if it had passed both chambers of 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.
'Exercise in futility'
On Thursday, the White House criticised Republicans, saying Mr Boehner's response to compromises from the president was "to walk away" from negotiations.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".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'
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.
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.
Mr Obama's latest offer included a tax rise on incomes over $400,000 (£247,000), an increase on the $250,000 level he had originally sought. Mr Obama had sought tax rises for the wealthy, but was pushing for a lower threshold of $400,000.
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".
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.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.The Organization for Economic Co-operation and Development (OECD) said in its latest economic outlook that the recession from the cliff could become global.