Republican revolt forces last-minute halt on bill to avert cuts, tax increases.

Republicans in the House of Representatives, confronted with a revolt among the party's rank and file, abruptly put off a vote yesterday on politically charged but largely symbolic legislation aimed at averting a fast-approaching "fiscal cliff", after failing to gather enough support for a measure meant to position the party for final compromise talks with President Barack Obama.

That complicates attempts to avoid the year-end fiscal cliff, the package of automatic spending cuts and tax increases that threatens to send the economy back into recession.

In a brief statement, House Speaker John Boehner said the bill "did not have sufficient support from our members to pass".

He challenged Obama and Senate Majority Leader Harry Reid to work on legislation to avert the fiscal cliff.


Emerging from a hurriedly-called evening meeting of House Republicans, Congressman Steve LaTourette said Boehner had told politicians, "He's going to call the President and he's going to go down and talk to him and maybe they can hammer something out."

Even if Boehner's so-called Plan B legislation drafted unilaterally by Republicans had passed the House, the White House had threatened a veto, and Senate Democrats had made plain they would sidetrack the bill. Yet officials in both parties suggested the House vote would have cleared the way for a final stab at negotiations.

The fiscal cliff has dominated the post-election session of Congress that now seems certain to extend well beyond Christmas. More broadly, it marks the end of a tumultuous two-year period in which dozens of conservative Republicans roared into the House demanding lower taxes, yet now find themselves two years later called on by their own leadership to raise rates on upper incomes.

Ironically, the votes were set in motion earlier in the week, after Boehner and Obama had significantly narrowed their differences on a compromise to avoid the fiscal cliff.

Republican officials said members of the party's leadership had balked at the terms that were emerging. Democrats said Boehner's abrupt decision to shift to his Plan B reflected a calculation that he lacked support from his own rank and file to win the votes needed for the type of agreement he was negotiating with the President.

Boehner, chastened by Obama's re-election, has violated a quarter-century of Republican dogma by offering to raise income tax rates on earnings exceeding US$1 million annually.

Obama, eager for a budget deal that would let him move on to other issues, in turn would cut the growth of Social Security pensions, an issue usually off-limits to Democrats. By offering to impose tax increases on those with incomes over US$400,000, he has retreated from what he campaigned on: the US$200,000 income ceiling on individuals and US$250,000 on couples.

That means both men have angered politicians and staunch supporters of their respective parties, just when the need to retain that support is crucial.

Hence Boehner's Plan B vote, which was meant to rally the Republican troops. It called for preventing tax hikes for anyone earning less than US$1 million in annual income.

And it blocked cuts to the defence budget, a Republican red line, by cutting social programmes cherished by Democrats, such as food vouchers and the landmark healthcare law that Obama signed earlier in his term.

- AP