Wall Street bounces back on hope for "cliff’ solution

Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New YorkNEW YORK (Reuters) – U.S. stocks rebounded from early losses on Thursday after Republican House Speaker John Boehner said he would keep working on a solution to the "fiscal cliff" while also slamming President Barack Obama's approach to budget talks. NYSE Euronext was the S&P 500's biggest gainer, surging 34 percent to $32.25 after IntercontinentalExchange Inc said it would buy the operator of the New York Stock Exchange for $8.2 billion. ICE shares shot up 1.4 percent to $130.10. Republicans in the U.S. …

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Wall Street rebounds on some "cliff’ progress

Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New YorkNEW YORK (Reuters) – U.S. stocks rebounded from early losses on Thursday, as stocks caught a bit of buying action after Republican House Speaker John Boehner said he would keep working on a solution to the "fiscal cliff" while also slamming President Barack Obama's approach to budget talks. The Dow Jones industrial average was up 59.75 points, or 0.45 percent, to end unofficially at 13,311.72. The Standard & Poor's 500 Index was up 7.88 points, or 0.55 percent, to finish unofficially at 1,443.69. The Nasdaq Composite Index was up 6.02 points, or 0.20 percent, to close unofficially at 3,050.39. …

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Wall Street flat amid stalemate in fiscal talks

Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New YorkNEW YORK (Reuters) – Stocks were little changed on Thursday as investors fretted that a deal on the U.S. budget wouldn't come as soon as they had hoped after President Barack Obama threatened to veto a controversial Republican plan. NYSE Euronext was the star of the day, surging more than 30 percent as the S&P 500's top percentage gainer, after IntercontinentalExchange Inc said it would buy the operator of the New York Stock Exchange for $8.2 billion. NYSE was up 31.9 percent at $31.72, while ICE shares gave up earlier gains to fall 2 percent to $125.77. …

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US STOCKS-Wall Street flat amid stalemate in fiscal talks

* Investors seek clarity on fiscal negotiations * NYSE Euronext shares soar, ICE to buy for $8.2 billion * Third-quarter GDP tops expectations; market barely reacts * Dow off 0.1 pct, S&P 500 up 0.01 pct, Nasdaq off 0.2 pct NEW YORK, Dec 20 (Reuters) – U.S. stocks were little changedon Thursday as investors fretted that a deal on the U.S. budgetwouldn’t come as soon as they had hoped after President BarackObama threatened to veto a controversial Republican plan. …
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And Now We Have Our First Real Drama Of The Fiscal Cliff Talks…

john boehner

President Barack Obama and House Speaker John Boehner made it clear Wednesday that talks have broken down over how to avoid the fiscal cliff, regressing to political posturing just when it seemed like a deal could be imminent. 

The showdown centers around Boehner’s decision to call a floor vote Thursday for his so-called “Plan B” bill, which would allow the Bush-era tax cuts to expire only for incomes over $1 million. 

The move is a tacit signal that the Republican Speaker is walking away from the concessions offered by Obama, and effectively giving up on passing a comprehensive fiscal cliff deal that includes both revenue increases and spending cuts.

“The president’s offer of $1.3 trillion in revenues and $850 billion in spending reductions fails to meet the test that the president promised the American people – a balanced approach,” Boehner said in dramatic, 50-second “press conference” Wednesday. “Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American – 99.81 percent of the American people. And then the president will have a decision to make: He can call on Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history.”

The “Plan B” vote is a tactical maneuver by Boehner, aimed at forcing Democrats to vote for the bill or risk raising taxes on the vast majority of Americans. According to Republican insiders, the thinking is that by getting the revenue question out of the way, the GOP will have more leverage to negotiate spending cuts and entitlement reforms during the debt ceiling debate next year. 

Obama, meanwhile, has promised to veto the “Plan B” bill should it get to his desk. In his dueling press conference Wednesday, he accused Republicans of walking away from an imminent compromise that had included big concessions from the White House, including raising the income tax threshold to $400,000 and changing cost-of-living adjustments for Social Security. 

“They keep on finding ways to say no, as opposed to finding ways to say yes,” Obama said. “This is not a situation where I’m unwilling to compromise. This is not a situation where I’m trying to rub their face in anything.  I think anybody who looks at this objectively would say that coming off my election, I have met them at least halfway in order to get something done for the country.” 

The main question now is whether Boehner can actually get Republican House members to vote for his “Plan B” bill, which would force the party to take the unprecedented move of raising marginal tax rates.

Democrats have united against the bill, so Boehner can only afford to lose about 18 votes on the Republican side. But several fiscal hawks in the GOP caucus have already come out publicly to oppose the “Plan B” option, and two powerful grassroots conservative groups have urged members to vote “No,” so its passage remains uncertain. 

The Washington Post reports that GOP leaders fanned out across the House floor this afternoon to cajole members into voting, and that they will meet tonight to decide whether they have the votes, or whether they need to tie the “Plan B” bill to another bill that cuts spending in order to make it more palatable to the party’s rank-and-file. 

Needless to say, if the bill doesn’t pass, it will be a total disaster for Boehner. At that point, the only option will be to come up with a compromise that can pass the House with bipartisan support. But with less than two weeks to go until the cliff deadline, it is not clear whether there will be enough time — or good will — to reach a deal.

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Top Conservative Groups Are Dueling Over The Fate Of Boehner’s ‘Plan B’ On The Fiscal Cliff

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Shortly after Grover Norquist’s Americans for Tax Reform gave Republicans the go-ahead to vote for House Speaker John Boehner’s “Plan B,” two top conservative groups urged GOP representatives to vote “no” on the measure.

While ATR gave Boehner some cover, Heritage Foundation and Club for Growth came out against Boehner’s new plan, which would see taxes revert to higher rates on incomes above $1 million per year or more while permanently preserving the cuts for anything less. It’s a plan that once was rather unthinkable to Republicans because of its tax increases, and one that conservative groups signaled they will continue to oppose.

Heritage accused Boehner of embracing “the other side’s political gimmick, as is the case with the Schumer-Pelosi tax plan.” The Club for Growth, meanwhile, said it wouldn’t “buy into Washington-speak, suggesting that these are actually tax cuts.” Some conservatives believe Norquist’s group is looking for political cover from its all-or-nothing pledge.

All of the groups’ sentiments are significant as Boehner looks to secure the votes needed to pass “Plan B.” There are 241 Republicans currently in the House. If no Democrats vote for the plan, Boehner can only afford to lose a maximum of 23 members of his own party. 

Because the Club for Growth is especially effective at mounting primary challenges, it will force Republicans to think hard about backing Boehner’s plan. And while Boehner and others are pushing the message that their plan is actually a tax cut, both Heritage and the Club for Growth explicitly denounce that.

Here’s the Club for Growth’s full statement:

The Club for Growth urges all House members to vote “NO” on the rule for the so-called “Plan B” tax increase. Consideration of the bill is scheduled for later this week. The vote on the rule will be included in the Club’s 2012 Congressional Scorecard.

On the substance, this bill is anti-growth. It increases tax rates for those making over $1 million while also raising taxes on capital gains and dividends. We don’t buy into the Washington-speak, suggesting that these are actually tax cuts.

Also, it’s no secret that this bill is not a final product, but a bargaining tactic to make a larger deal even worse. As such, we cannot support it just on substance, but also the procedure which dictates its consideration. Therefore, we are urging all members to oppose the rule.

Our Congressional Scorecard for the 112th Congress provides a comprehensive rating of how well or how poorly each member of Congress supports pro-growth, free-market policies and will be distributed to our members and to the public.

And Heritage:

On Thursday, the House is expected to vote on “Plan B,” which would allow tax rates to increase on some Americans and small businesses.  The plan is based on an idea floated by Senator Chuck Schumer (D-NY) in 2010 and endorsed by House Minority Leader Nancy Pelosi (D-CA) earlier this year.

America’s coming fiscal crisis is a result of overspending, not under-taxing.  Allowing a tax increase to hit a certain segment of Americans and small businesses is not a solution; it is a political ploy.

The Heritage Foundation explains that such a “maneuver succeeds only if the House Republican leadership permits it.”  Moreover, decoupling the 2001- and 2003-era tax rates would “constitute a clear path toward surrender on conservative principles.”  Taking money out of the private sector to fund the public sector is not only misguided, it is counterproductive.  Reversing course on the need for higher taxes will only serve to embolden the left’s big-government agenda.  History has shown tax increases do little to stem annual deficits; in fact, deficits tend to increase.

To date, President Obama has proven to be fundamentally unserious about tackling our nation’s coming fiscal crisis.  America needs real leaders proposing real solutions, such as those found in Heritage’s Saving the American Dream plan or even the previous House-passed budget.  That seriousness of purpose is undermined when a political party embraces the other side’s political gimmick, as is the case with the Schumer-Pelosi tax plan.

Heritage Action opposes “Plan B” and will include it as a key vote on our legislative scorecard.

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John Boehner Gives One Minute Fiscal Cliff Press Conference, And Then Storms Off Without Taking Questions

john boehner

In one of the strangest moments of the fiscal cliff debate so far, House Speaker John Boehner delivered an abrupt statement Wednesday, warning President Barack Obama to “get serious” about negotiations. 

The 50-second “press conference” was in response to Obama’s criticism over Boehner’s “Plan B” option, which would extend the Bush-era tax cuts for everyone making under $1 million — far above the $250,000 income threshold demanded by President Barack Obama.

The plan is a tactical move by the Speaker, who is clearly frustrated with the pace of negotiations with the White House.

On Wednesday, the White House slammed the “Plan B,” bill blasting out a four-page analysis that claims the legislation does not go far enough to help the middle class, and accuses Republicans of “perversely” leaving out any spending cuts. Obama confirmed Wednesday that he would veto the bill if it gets to his desk.

Boehner’s office hit back this morning, calling the White House’s opposition to the bill “bizarre and irrational.”

But Boehner’s “Plan B” has also come under serious fire from conservatives in his own party who oppose any increase in marginal tax rates. Both Heritage Action and the Club For Growth — two major grassroots conservative groups — sent memos to Republican members of Congress Wednesday, urging them to vote against “Plan B.” 

Democrats have signaled that they won’t vote for the bill, despite having proposed similar legislation themselves earlier this year. 

“You can’t turn back the clock,” New York Sen. Chuck Schumer, the third-ranking Democrat in the Senate, said Wednesday. “The political landscape has changed. The Pres. ran on $250k.”

Boehner is set to speak at 2:15 p.m. We’ll update this post with his remarks. 

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