So what's Plan C?

What happens when Plan B fails?  That answer may matter less than the question of what happens to the man who promised Plan B would work in the first place.  Chris Cillizza writes that John Boehner climbed onto a big limb with Plan B … and then watched as his own caucus sawed it off:

To be clear: This was a gambit by Boehner designed to be a show of force to President Obama. This was Boehner putting himself out on a limb in hopes wavering members would follow him. This vote mattered to Boehner.

And he lost it.

It’s not clear what the fallout within the chamber will be — there is no obvious challenger to Boehner as Speaker but one could, of course, appear in the wake of this moment — but here’s what we now know:

1. Any bargaining power Boehner had with Obama — or hoped to have — is gone.  The goal of passing “Plan B” was to be able to say to the president and Senate Democrats that House Republicans were the only people who had passed something that would avert the fiscal cliff. Now, not so much.  Obama already had the upper hand in these negotiations — he was reelected just over a month ago — and Boehner knew it. What happened on the House floor Thursday night made a bad bargaining situation for Boehner that much worse.

Actually, that’s not just bad news for John Boehner.  It’s bad news for Barack Obama, too.  In order to negotiate on these issues — either before or after plunging off the fiscal cliff — Obama has to win a vote in the House, too.  That means he needs a negotiator who can deliver on a package, presumably with enough Republican votes to get political cover on a compromise.  Boehner can’t reliably  do so, thanks to the internal divisions in the House Republican caucus, which means that Obama doesn’t have a lot of leverage in the lower chamber, either.

On the other hand, Chris Frates writes at National Journal, perhaps this was the strategy all along:

But behind the rhetoric there was a strategy at play. The plan appeared designed to move Obama toward the speaker’s position of smaller tax increases and larger spending cuts while helping conservatives wrap their heads around the idea of voting for a tax hike.

The speaker struggled to round up GOP votes for a package that only would have raised taxes on millionaires. If Boehner had trouble selling his own package, it sends a message to Obama that his position, raising taxes on people who make over $400,000, is going to be even tougher to pass.

Amid rank-and-file House Republicans, there was growing opposition to the Boehner-Obama talks. If that feeling was allowed to fester, Boehner feared he would not be able to muster enough support for an eventual deal with Obama. Thursday’s vote was supposed to ensure that conservatives would have their fingerprints on any final result by bringing them into the deal-making process.

Though Boehner couldn’t get his caucus on record supporting a tax hike, his voter counters now have a much better idea of how many Republicans could get behind that approach.

That’s important because if Obama and Boehner strike a deal, he won’t need to deliver all the votes himself. An Obama-blessed package will win support from House Democrats, who opposed Plan B. Most Republican insiders believe Boehner only has to deliver about half his members to keep his speakership.

CBS’ Brian Montopoli and Steve Chaggaris are less optimistic:

Boehner sent House Republicans home for Christmas after last night’s legislative collapse, ensuring nothing will be passed until Dec. 27 at the earliest, when members are due back in town.  That leaves Boehner and President Obama to keep negotiating – something that ground to a halt after Boehner announced he was moving forward with his “Plan B” earlier in the week.

But the two are at a stalemate, even though they’re not that far apart in their proposals. In their most recent offers, Mr. Obama was offering $1.2 trillion in revenue and $800 billion in spending cuts; Boehner was offering $1 trillion in revenue and $1 trillion in spending cuts.  Also, the president agreed to let the Bush-era tax cuts expire on those making over $400,000; Boehner is supporting a $1 million threshold, to the consternation of some in his party who don’t want anyone’s taxes to go up.

The president is hoping to get to Hawaii for Christmas – he was planning on leaving town today but without a “fiscal cliff” deal, it’s unclear whether he’ll get to the Aloha State at all for the holiday.  Meantime, Boehner wakes up today with the realization that he has a seemingly irreparable schism within his own ranks: there are just enough Republicans who refuse to budge on taxes and are demanding more spending cuts, especially on entitlement programs such as Medicare, therefore gumming up the works for any progress Boehner wants to make on the “fiscal cliff”.

Ultimately, negotiations between the president and Boehner might be over, especially since it’s clear to all parties after last night that Boehner doesn’t have the votes to get any compromise through the House.

To paraphrase Animal House, it’s not over until they say it’s over.  Obama doesn’t have anyone else to negotiate with except John Boehner, and vice versa.  That was the outcome of the election, and barring a change in Speaker, the two are negotiating partners for the next two years.  And Obama won’t want a change in Speaker, because it’s likely to be Eric Cantor, who will be more difficult as a negotiator.

Therefore, I suspect that Obama and Boehner might find common ground on a Plan C to kick the can down the road another two months.  They can apply the full AMT patch that way and get the IRS out of the way, while then staging a new deadline that will force Republicans to tie the debt ceiling to the tax debate rather than just entitlement reform, which has been the GOP strategy.  That will allow both sides to avoid the immediate consequences of the fiscal cliff and get out of town for the holidays, while setting up the next showdown.

Otherwise, we have what our friend Duke calls the Obamamite Maneuver: Call a vote on Obama’s proposal in the House and have all Republicans vote “present.” That way Obama owns the consequences of his bad economic policy without any Republican fingerprints, the fiscal cliff gets avoided, and the debt ceiling remains a bargaining chip for the GOP in February to get real entitlement reform and deficit reduction in place. At least that would be less embarrassing than what happened yesterday in the House.