CNN: Reid hunting for Senate (and House) votes for Obama's fiscal cliff bill; Update: U.S. to hit debt ceiling on Monday, says Geithner

If you’re wondering what the House’s Plan C might be, stop wondering. According to Boehner’s conference call this afternoon, America’s in Harry Reid’s hands now:

Reid’s plan, according to a “senior Democratic source,” is to do what Obama wants, of course:

Senate Majority Leader Harry Reid, in conjunction with the White House, is working to see if the scaled back fiscal cliff package President Barack Obama laid out last week can get through Congress before December 31st.

Reid has made clear in private conversations he does not want to bring any bill to the Senate floor unless he is sure it will pass both the Democratic-led Senate and the Republican-held House…

As far as the House goes, Democrats believe if they can get a bill through the Senate, it is likely they can get it through the House with most Democrats voting yes and, Democrats hope, about 30 or so House Republicans crossing party lines

The scaled back measure being developed by Democrats would first and foremost keep tax rates at current levels on incomes under $250,000 and let taxes go up on income above that threshold.

The point of the Plan B kabuki was to force Obama to up his offer on the income cut-off for new taxes by showing that Boehner could hold his caucus together. If he could get 218 Republican votes for a bill extending the Bush tax cuts for everyone who earns less than $1 million per year, he’d prove to the White House that he could get a critical mass of GOPers to agree to de facto tax hikes on the rich — so long as the income cut-off was set relatively high.

When Plan B failed, so did his leverage on that point. Now the White House knows that the final bill, if it passes before December 31, will only pass with Democratic votes, which means it’ll have to be more liberal than Plan B. Bailing on Boehner thus means more small businesses will feel the crunch next year unless centrist Republicans stick with the rest of the caucus right now and refuse to pass Obama’s plan if he doesn’t raise the income cut-off from $250,000. Somewhere between that number and $1 million lies the number that’s going to get a deal done. Obama already proposed making the cut-off $400,000, so presumably he’ll end up back at that number (or higher) unless there’s a complete breakdown in Republican discipline and Obama/Reid/Pelosi somehow manage to peel off 30 GOP votes for the $250,000 mark. Anyone feel confident that that won’t happen with the December 31 deadline bearing down? Bear these new numbers from Gallup in mind when making your prediction:

Per CNN, Democrats figure — wisely — that their best chance to get O’s plan through the House is to time it so that the bill ends up there on December 30 or 31, when political pressure on the GOP will be at its zenith. Which makes me wonder: Will Boehner try to block the bill or will he let it come to the floor? The vote for the next Speaker happens just a few days later, on January 3; if he allows Democrats to pass a bill with token Republican help that hikes taxes on everyone who makes $250,000 or more, there may be enough conservative opposition to end his Speakership. It’s in his own political interest at this point, then, to go over the cliff, let the tax hikes take effect across the board, and then let the House vote on cutting the “new,” higher tax rates for earners below $250,000. So we’re going over the cliff, I guess.

Update: It’ll be mighty interesting to see what Obama does between now and New Year’s. As I said above, he’ll have a better shot at getting those 30 GOP votes he needs if he ups his offer on the income cut-off. But if we go over the cliff, he might not need to up his offer; there might be enough panicky Republicans to raise taxes on earners above $250,000 after January 1 simply in the interest of ending this clusterfark. Is O ready to cliff dive in the interest of keeping his preferred income cut-off as low as possible?

Update: The fiscal cliff standoff isn’t just about tax hikes, although it often feels that way. It’s also about raising the debt ceiling. Obama wants it raised for a year or more so that he doesn’t have to deal with Republicans trying to extract new spending cuts from him next year; conservatives don’t want it raised at all until O proves he’s serious about deficit reduction.

Coincidentally, here’s Obama’s Treasury secretary informing the country at a moment of intense pressure on the GOP that we’re about to hit the debt ceiling. Again.

As a result, the Treasury Department will soon start using what it calls “extraordinary measures” to prevent government borrowing from exceeding the legal limit, Geithner wrote…

But it’s unclear how much time the extraordinary measures can buy now because there are so many unanswered questions about tax and spending policies, Geithner said, referring to the lack of any resolution of the fiscal cliff.

“If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures,” he wrote.

Think Obama can find 30 Republicans willing to vote “yes” on a bill to make all of that go away?