The Failure of Plan B

by Gregory Koger on December 21, 2012 · 5 comments

in Blogs

After the House Republicans punted on legislation to extend the Bush tax cuts for all non-millionaires last night, today’s news cycle has been focused on a) what the failure of “Plan B” means for the fiscal cliff negotiations and b) what the failure means for Speaker Boehner. After great posts by Ezra Klein, Sarah Binder, Matthew Green, and dozens of others, I thought my best contribution might be a close read of the legislative history. So I started by reading (summaries of…seriously, have you ever tried reading actual legislation?) the Plan B legislation to glean its lessons.

Lesson 1: Tis the season for immaculate taxception!

Plan B actually featured two pieces of legislation: first, a bill to block defense sequestration and offset this spending with domestic spending cuts (see below), and legislation to extend current tax rates for non-millionaires. The House GOP brought them up together with a single “special rule” proposed by the Rules Committee. Ordinarily, a special rule (so called because the House literally makes up new rules for each piece of legislation) makes a single bill in order. Over the last couple decades, however, the majority party has occasionally used a “MIRV rule,” which brings up multiple pieces of legislation that are formally separate but informally tied together.*

Why not two rules? Or one rule and one big bill of spending and taxes? One benefit of this MIRV rule is that the meaning of a vote for the rule is obscured; a member can say s/he was really voting bring up one bill and not the other. And by separating the bills, it is possible for the coalition supporting one bill to differ from the coalition supporting the other—or for one bill to fail while the other passes. In this case, a Republican MC could deny voting to bring “tax increase” legislation to the floor.

While the media report what the House was going to vote on, the bill actually on the floor was a bill to continue sanctions on Burma, to which the Senate attached disaster relief spending in 2011. The special rule empowered the chair of the Committee on Ways and Means to strike all the Senate’s text and introduce the GOP amendment. In other words, the House GOP was recycling an old bill rather than write a new one, thereby avoiding the scrutiny that occurs when the public can read a bill for, let’s say, three days before it comes to the House floor.

Lesson 2: Sacrifice seems to be the hardest word

While most of the attention is on the failure of the House GOP to even bring its tax legislation to a vote, the opening act was the narrow passage of a bill to stave off the defense sequestration and substitute domestic spending cuts instead. Read the Voteview analysis of the 215-209 vote here. But I also recommend reading the CRS summary of the bill. It includes items like:

  • cutting food stamps for Puerto Rico and American Samoa.

  • blocking HHS grants to help states set up health exchanges

  • “Repeals provisions that increased Medicaid payments to territories though FY2019. Decreases the federal medical assistance percentage (FMAP) for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.”

  • eliminating the Dodd-Frank plan (the Orderly Transition Fund) to help large too-big-to-fail firms in crisis (as I read it)

  •  eliminating the Federal Reserve’s funding authority for the Consumer Financial Protection Bureau (as I read it)

  • malpractice lawsuit reform

  • Repeals the program of block grants to states for social services under title XX (Block Grants to States for Social Services)

While I am not briefed on the details of Speaker Boehner’s negotiations with President Obama, I would guess that some these are not mutually agreeable, which suggests its likelihood of becoming law are extremely low.


So What Just Happened?

After reading Robert Draper’s book on the 2011 debt limit fight, I was impressed by the House GOP’s ability to get ahead of the Democrats by passing bills that embodied their negotiating position through the House and then publicly insisting that the Democrats either accept their legislation or produce their own. Plan B seems to be an instance of the same strategy. The House GOP leaders probably did not really expect they would pass the Senate and become law. But, once the House passed the Plan B bills, its members could go home and wait for the Senate to either pass their bills (which would be a huge GOP win) or to take the blame for the crisis extending into 2013—a political win for the GOP, improving their bargaining position in January.


Of course, in order to pull this off, the House GOP had to vote to allow taxes on millionaires to go up. Some might consider that a vote to increase taxes, so as individuals the House Republicans who voted for the tax bill could face opponents in the 2014 primaries accusing them of raising taxes. This is a classic collective action dilemma: even if the bill was good politics for the Republicans collectively, as individuals it was very costly for Republicans to support.


If, as seems likely to me, there will be no fiscal cliff compromise in 2012, the House GOP will have to defend its actions without the political cover provided by the Plan B bills. If the GOP ends up bearing most of the blame, Speaker Boehner’s position would arguably improve; he will be able to remind his conference that they would have been better off politically and gotten a better deal if they had followed his lead yesterday.

  • an earlier example: a 1999 special rule bringing up a juvenile justice bill and a gun show background checks bill in the wake of the Columbine shooting.

{ 5 comments }

Thomas December 21, 2012 at 6:43 pm

Why not three bills instead of two? One to keep tax rates in place for incomes above $1 million, one for incomes below $1 million, and one for spending? Is that not permitted under the rules? If it is permitted, why wouldn’t it resolve the collective action problem?

Gregory Koger December 21, 2012 at 11:24 pm

That’s a good question…a separate bill maintaining the current rates on income > $1 million would enable House GOP members to claim they extended the current rates for everyone. I would guess, though, that voting for such a bill would make explicit how large a tax break this is for a limited number of people. That vote might resonate in the next general election.

Larry Bartels December 21, 2012 at 9:12 pm

Calling this “legislation to extend the Bush tax cuts for all non-millionaires” or “legislation to extend current tax rates for non-millionaires” is convenient but misleading shorthand. “Plan B” would have provided bigger tax breaks for millionaires than for anyone else, by extending current low rates on their first $1 million in taxable income. Just sayin’.

Gregory Koger December 21, 2012 at 11:29 pm

That’s a very fair point. I was being lazy. “Extending the current rates for the first $1 million in income” would have been more precise.

Dean Eckles December 22, 2012 at 2:50 am

I also find it odd that somehow “millionaire” now denotes someone with a million in income in a year — a very radical change in meaning that suggests inaccurate similarity between the wealthy and the very wealthy.

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