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Republicans call off ‘Plan B’ fiscal cliff vote

The plan would have allowed taxes to increase on those making more than $1 million a year.

WASHINGTON — Republican leadership cancelled a Thursday night vote on a plan to keep low tax rates for those making less than $1 million because they didn’t have the votes to pass it.

Speaker John Boehner’s so-called “Plan B” would have prevented a year-end tax increase on everyone except those making $1 million or more per year. The plan was the Republicans’ answer to President Obama’s most recent proposal to allow taxes to increase for those making more than $400,000.

Obama had threatened a veto, and the bill was unlikely to make headway in the Democratic-controlled Senate.

Republicans in the Minnesota delegation were split when it came to the vote. John Kline told MPR the bill could have eventually become a vehicle for a final fiscal cliff deal, if the Senate took it up. Michele Bachmann didn’t comment publicly on how she would vote and wasn’t answering questions on the matter Thursday night.

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Chip Cravaack, meanwhile, said Thursday he was planning to back the plan as long as the House passed a bill enacting deep spending cuts, which it did.

“Everybody understands, it’s a spending issue,” he said. “We’ve got to get something passed, we’ve got to do something that’s beneficial to the American people. … People don’t mind increasing their taxes as long as they know it’s going to something good.”

The plan was controversial in the Republican caucus because it essentially asked members to permit a tax increase on millionaires. Hardly any Democrats, if any at all, planned to vote for the proposal (most having already backed a plan over the summer to preserve the tax cuts for those making less than $250,000), putting all the pressure on Republicans to produce the 218 votes to pass the bill from the chamber. Boehner could afford about two dozen defections from his caucus, but no more than that.

Conservative interest groups were split on the issue; Grover Norquist’s Americans For Tax Reform said a yes vote would not violate the group’s no new taxes pledge. Others, like tea party-aligned FreedomWorks and the Club for Growth, opposed the bill.

In a statement, Boehner said, ” Now it is up to the president to work with Senator [Harry] Reid on legislation to avert the fiscal cliff. The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation’s crippling debt. The Senate must now act.”

The House passed in a bill in August to preserve all the Bush tax cuts, but the Senate never took it up.

So here’s where we stand on the fiscal cliff. The House is done for the week  thought it may be called back in for post-Christmas votes. President Obama’s latest proposal would have taxes increase for those making more than $400,000, cut about $725 billion from entitlement programs and about $200 billion in discretionary spending. (The Washington Post a chart of all the offers here. Tonight’s “Plan B” is on the far right.)

Since Republicans were unable to secure the votes to pass tax relief for those making less than $1 million, it’s unlikely they’ll have the votes to support higher taxes that kick in at a much lower threshold (Cravaack, for example, said $1 million was the lowest figure on which he would be comfortable raising taxes). Thus, any final fiscal cliff deal would need the help of several Democrats.

If no deal is reached, of course, everybody’s taxes go up next year, and deep discretionary and defense spending cuts kick in.

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Devin Henry can be reached at dhenry@minnpost.com.