Facing a rank-and-file GOP revolt, House Speaker John Boehner abruptly canceled a vote Thursday night on a plan to raise taxes for the wealthy, bringing the country closer to a plunge down the "fiscal cliff."
The House then recessed until after Christmas. The development raises questions about whether Boehner could muster support among Tea Partyers in the GOP-controlled House for a broader deal to avert the automatic tax hikes and spending cuts on Jan.1.
Senate Majority Leader Harry Reid said the sudden development showed that Boehner must now work with Democrats to try to avoid the cliff.
"Speaker Boehner's partisan approach wasted an entire week and pushed middle-class families closer to the edge," Reid said. "The only way to avoid the cliff altogether is for Speaker Boehner to return to negotiations, and work with President Obama and the Senate to forge a bipartisan deal."
According to a GOP source familiar with the vote coun, "the veto threat and opposition from the White House and the Senate Majority Leader made some members feel like they were taking a risky vote for no reason, even though the bill did not actually include a tax hike. Now, the President and Senate Majority Leader must find a solution to this crisis."
Stock future prices sank immediately after the vote cancellation, but recovered some lost ground. (Click here for the latest premarket prices.)
Boehner and House Majority Leader Eric Cantor had predicted passage of the "Plan B" bill to raise taxes on people earning over $1 million a year, despite opposition from conservatives. But in a statement Thursday night, Boehner said: "The House did not take up the tax measure today because it did not have sufficient support from our members to pass."