Next Move Is Obama’s After Boehner’s Tax Plan Fails

By JACKIE CALMES

WASHINGTON — With House Republicans’ revolt over their leader’s tax plan the evening before, President Obama on Friday faced the challenge of finding a new tax-and-spending solution — perhaps working now with Senate Republicans — to prevent a looming fiscal crisis in January.

Yet as the day dawned, officials at the White House remained as incredulous and bewildered as the rest of Washington after Speaker John A. Boehner, short of votes from his Republican majority, was forced to cancel Thursday’s vote on what he called his “Plan B.” It would have extended the soon-to-expire Bush-era tax cuts for all income up to $1 million to avert a tax increase for more than 99 percent of Americans but also, to the anger of the anti-tax conservative mutineers, would have raised the top tax rate for higher income to the level of the Clinton years.

Now Mr. Obama is looking for his own Plan B, just four days before Christmas and 10 days before a deadline for a deal to avoid the tax increases and deep, across-the-board cuts in military and domestic programs scheduled after Dec. 31.

Officials in the administration and Congress, and in both parties, suggested the likeliest route was for Mr. Obama to seek a bipartisan accord with Senator Harry Reid, the Nevada Democrat who is the Senate majority leader, and Senator Mitch McConnell of Kentucky, the Senate Republican minority leader, and hope that it could get through the House under deadline pressure. Last year, when the president and Mr. Boehner were at an impasse over getting Congress to approve the essential increase in the nation’s borrowing limit, it was the wily Mr. McConnell who first suggested the legislative way out of the mess. But Mr. McConnell faces re-election in 2014 and will be very reluctant to engage in any deal-making that could draw him a primary challenge in his conservative state.

Mr. McConnell has given no indication of his next move, but a spokesman, Don Stewart, offered no hint on Friday morning of an immediate helping hand. “I sure hope they have a plan of their own,” said Mr. Stewart, referring to Democrats Mr. Obama, Mr. Reid and the House minority leader, Representative Nancy Pelosi.

A number of Senate Republicans, unlike most party colleagues in the House, say they could support a deficit-reduction plan raising tax rates on high incomes, if Democrats agree to significant reductions in the growth of Medicare and Social Security. But both Republicans and Democrats are being assailed by party allies – groups on the right against any tax increases and on the left against cuts in entitlement-program spending.

If Mr. Obama were to reach some agreement that passes in the Senate, it still must get through the House. That, people in both parties say, could confront Mr. Boehner – who controls the Republican Party’s one lever of power -- with a decision about whether to allow a vote on a measure that presumably could not pass with Republican votes, but would have to be carried over the line with Democrats’ votes.

That prospect in turn gives rise to the question of whether Mr. Boehner can survive the House vote for speaker on Jan. 3, when the new Congress will include fewer Republicans given party losses last November.

Adam Jentleson, spokesman for the Senate Democratic leader, Mr. Reid, said in a statement, “It is now clear that to protect the middle class from the fiscal cliff, Speaker Boehner must allow a bill to pass with a combination of Democratic and Republican votes.”

The House, at Mr. Boehner’s direction, closed down until after Christmas and members dispersed. The president, who once had planned to leave on Friday with his family for its traditional Christmas vacation in Hawaii, would stay at the White House pending “the next moves,” said a senior administration official, who, like most others interviewed, would not be identified given the uncertainty about the next step. “If there is action this weekend, he will be here.”

On Thursday night, White House press secretary Jay Carney said in a statement, “The president’s main priority is to ensure that taxes don’t go up on 98 percent of Americans and 97 percent of small businesses in just a few short days. The President will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy.”

Events on Friday morning added to the drama. First, Mr. Obama observed a moment of silence for the victims of the school massacre one week ago in Newtown, Conn., a slaughter of innocents that people in both parties had suggested might melt some partisan divisions; last weekend it had seemed to foster negotiating progress between Mr. Obama and Mr. Boehner.

Then he was to speak at the funeral of longtime Senator Daniel K. Inouye, Democrat of Hawaii, where he would be thrown together with Mr. Reid and Mr. McConnell, leading the bipartisan Senate delegation.

While Mr. Obama had threatened a veto of the Boehner bill, and called the speaker’s pursuit of it a waste of time, the administration had hoped that once the House passed it – as Mr. Boehner had forcefully predicted on Wednesday – the speaker would return to the negotiating table. But now people in both parties express pessimism. Given Mr. Boehner’s inability to pass his own bill, which Republicans say he pursued only after he realized he did not have support in his caucus for the last offer he had made to the president a week ago, the speaker is a much-weakened figure, his own future in his job under a cloud.

The events in some ways could enhance Mr. Obama’s position politically. They force critics to rethink the widespread criticism of his negotiating skills in the 2011 debt-reduction talks, at least against evidence now that his negotiating partner, Mr. Boehner, indeed could not deliver enough Republican votes for a deal with tax increases. And with polls already showing most Americans would blame Republicans for failure of the fiscal talks, House Republicans’ meltdown ensures that.

But from the White House’s view, the repercussions for the economy of a dysfunctional power structure in Washington – and for Mr. Obama’s larger agenda of gun control, immigration and more – are too dire for any gloating.

For now, people in both parties say it is hard to imagine that the two sides can go beyond some fallback measure extending the Bush tax cuts for 98 percent of Americans and some other pending measures, to also achieve the hoped-for framework to limit entitlement spending and raise revenues enough to stabilize the mounting federal debt as the population ages and medical costs rise.

The outcome also casts doubt on Mr. Obama’s hopes for help from the business community in swaying Republicans.

Despite its much-publicized mobilization for a deal along the lines he favors, a coalition of well-known corporate leaders apparently had little influence in a Republican Party that has grown increasing populist and small-business oriented as the party base has shifted South and West. Working against it are conservative groups like Club for Growth with a record of defeating Republicans who support taxes in party primaries.