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| US cancels vote on Boehner's fiscal cliff 'Plan B' | US cancels vote on Boehner's fiscal cliff 'Plan B' |
| (35 minutes later) | |
| US Republicans have cancelled a tax vote in Congress, less than two weeks before a deadline for budget reform. | US Republicans have cancelled a tax vote in Congress, less than two weeks before a deadline for budget reform. |
| Republican House speaker John Boehner proposed the bill, which would have raised taxes on high earners. But right-leaning Republicans rejected it. | Republican House speaker John Boehner proposed the bill, which would have raised taxes on high earners. But right-leaning Republicans rejected it. |
| Analysts say the rejection has weakened Mr Boehner's position in negotiations with the White House. | Analysts say the rejection has weakened Mr Boehner's position in negotiations with the White House. |
| Politicians need to agree fiscal rules by 1 January, or steep tax rises and deep spending cuts will take effect. | Politicians need to agree fiscal rules by 1 January, or steep tax rises and deep spending cuts will take effect. |
| Analysts say the so-called fiscal cliff could take the US into recession. | Analysts say the so-called fiscal cliff could take the US into recession. |
| Despite the failure of the vote, major stock markets were little changed, as most analysts had expected this to be a long, drawn out process. European markets were down in the first half hour of trading, but by less than 0.5%. | Despite the failure of the vote, major stock markets were little changed, as most analysts had expected this to be a long, drawn out process. European markets were down in the first half hour of trading, but by less than 0.5%. |
| Veto threat | Veto threat |
| Mr Boehner said he had been unable to garner sufficient votes to secure passage of the bill. | Mr Boehner said he had been unable to garner sufficient votes to secure passage of the bill. |
| Even a bill that was presented to Republicans in the House of Representatives as a $3.9 trillion tax cut could not persuade enough of them to back it. Why? Because it also proposed raising taxes on people earning more than $1m. For the class of 2010 in particular, talk of raising any taxes amounts to heresy. | Even a bill that was presented to Republicans in the House of Representatives as a $3.9 trillion tax cut could not persuade enough of them to back it. Why? Because it also proposed raising taxes on people earning more than $1m. For the class of 2010 in particular, talk of raising any taxes amounts to heresy. |
| House Speaker John Boehner hoped Republicans would swallow his so-called Plan B, a move that would strengthen his negotiating hand with the White House. Instead, they have snubbed him in a clear blow to his leadership. | House Speaker John Boehner hoped Republicans would swallow his so-called Plan B, a move that would strengthen his negotiating hand with the White House. Instead, they have snubbed him in a clear blow to his leadership. |
| If Mr Boehner wants to get a deal that pulls America back from the fiscal precipice he's going to have to do a bipartisan deal that pulls in Democrat support too. The cliff edge just got closer. | If Mr Boehner wants to get a deal that pulls America back from the fiscal precipice he's going to have to do a bipartisan deal that pulls in Democrat support too. The cliff edge just got closer. |
| Although it would have ensured a tax cut for 99.8% of Americans, it would have imposed a rise on those earning more than $1m (£600,000). | Although it would have ensured a tax cut for 99.8% of Americans, it would have imposed a rise on those earning more than $1m (£600,000). |
| 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". |
| Shortly after, the White House said President Barack Obama would work with Congress. | Shortly after, the White House said President Barack Obama would work with Congress. |
| The White House statement said it was "hopeful that we will be able to find a bipartisan solution quickly". | The White House statement said it was "hopeful that we will be able to find a bipartisan solution quickly". |
| Earlier on Thursday, the House narrowly passed a companion bill that would cut domestic spending while protecting the defence budget. | Earlier on Thursday, the House narrowly passed a companion bill that would cut domestic spending while protecting the defence budget. |
| The House is controlled by the Republicans, but the Senate is Democrat-led. | The House is controlled by the Republicans, but the Senate is Democrat-led. |
| Mr Boehner's plan would have had little chance of passing a Senate vote. | Mr Boehner's plan would have had little chance of passing a Senate vote. |
| Analysts say it was in effect an effort to tell the US public that the Republicans should not be blamed if a deal could not be reached. | Analysts say it was in effect an effort to tell the US public that the Republicans should not be blamed if a deal could not be reached. |
| But some believe that the White House has now been strengthened by Mr Boehner's failure. | But some believe that the White House has now been strengthened by Mr Boehner's failure. |
| 'Exercise in futility' | 'Exercise in futility' |
| White House spokesman Jay Carney earlier said Mr Boehner's plan was a "multi-day exercise in futility at a time when we do not have the luxury of exercises in futility". | White House spokesman Jay Carney earlier said Mr Boehner's plan 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. |