Boehner’s Hindenburg

Remember a few days ago when we were discussing a possible fiscal cliff deal that Obama might or might not go for? Well, Speaker of the House John Boehner discovered that his republicans would not support the tax increases on the those earning more than $400,000, the increase in capital gains and dividends taxes, and the cap on deductions at 28% of income. So Boehner abandoned that arrangement–it’s dead. Instead, Boehner proposed something called “Plan B”. (British readers are familiar with a different Plan B that proposes a stimulus alternative to their coalition government’s austerity policy; this is not that.) Plan B was substantially more favourable to the republican position, but nonetheless, the republicans in the house refused to support it, and now it is dead too. So where does this leave us in our struggle to avoid the fiscal cliff, the combination of large spending cuts and tax increases that kick in on January 1st and which the CBO forecasts will lead to a recession in 2013?

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