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| US House vote on fiscal cliff 'Plan B' cancelled | US House vote on fiscal cliff 'Plan B' cancelled |
| (35 minutes later) | |
| US Republicans have cancelled a vote in Congress on tax rises they hoped would help to avert a 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). |
| Republican leaders have said the Senate must now act, as the House of Representatives adjourns for Christmas. | 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. |
| Veto threat | Veto threat |
| 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. | 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. |
| He said in a statement that the bill "did not have sufficient support from our members to pass". | He said in a statement that the bill "did not have sufficient support from our members to pass". |
| In the wake of Mr Boehner's announcement, the White House said President Barack Obama's "main priority" would be to extend current tax rates for 98% of Americans and 97% of small businesses. | |
| The White House pledged to work with Congress, adding it was "hopeful that we will be able to find a bipartisan solution quickly". | |
| Earlier on Thursday, the House did narrowly pass a companion bill that would cut domestic spending while protecting the defence budget. | |
| 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 it had passed both chambers of 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' | '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". |
| 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. |
| 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 had sought tax rises for the wealthy, but was pushing for a lower threshold of $400,000. | 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. |