The Era of "Plan B" Kabuki Has Begun

A blog about business and economics.
Dec. 19 2012 2:48 PM

The Era of "Plan B" Kabuki Has Begun

At a 50-second "press conference" earlier this afternoon, John Boehner signaled that the fiscal cliff negotiations have re-entered the kabuki phase. He said the House of Representatives will vote tomorrow on a bill to permanently extend Bush-era tax rates on all income below $1 million, while AGI above $1 million would be subjected to the Clinton-era top marginal rate. "Tomorrow," he said, "the House will pass legislation to make permanent tax relief for every American. 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."

Senate Democrats of course aren't going to pass the bill. Instead they'll call on the House of Representatives to pass the bill that's already passed the Senate, and that extends Bush-era rates to all AGI below $250,000. And that will be the terms of the deadlock for the next few days.

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Whether that means there will be furious negotiations on Friday and Saturday before a grand bargain is revealed on Sunday in time for a few days of CBO scoring and a quick post-Christmas vote, or whether it means we just bluff through the New Year before House Republicans cave I couldn't yet say. But for a while at least—kabuki.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.