From Wall Street Journal Blog this AM
House Speaker John Boehner, facing a rebellion in his party’s conservative ranks, abandoned his own plan to avert tax increases for most Americans Thursday night, throwing Washington’s high-stakes budget negotiations into disarray and bringing the prospect of tumbling over the fiscal cliff into sudden focus. After pulling his bill without taking a formal vote, Mr. Boehner unexpectedly disbanded the House until after Christmas, leaving behind uncertainty about whether Congress and President Barack Obama would be able to avoid $500 billion in spending cuts and tax increases that begin in January.
House Republicans’ refusal to go along with Mr. Boehner’s tax plan represents a rebuke to the speaker that raises questions about his ability to lead his party in further budget negotiations with Mr. Obama. Negotiations between the White House and Mr. Boehner are at a standstill. The bill that failed Thursday, which would have raised income-tax rates on income over $1 million, was designed as a backup.
The dramatic course change, and the uncertainty about what will become of Washington’s budget negotiations, could rattle investors and financial markets that until now have been reasonably stable on the expectation that the White House and congressional leaders would strike a deal.