Republican "plan B" collapses - FT.com The fate of US negotiations to prevent the fiscal cliff were thrown into turmoil after efforts by Republican leaders in the House of Representatives to pass their back-up plan to stop most of the looming tax hikes collapsed amid a conservative backlash. After calling a dramatic emergency meeting of his own party's lawmakers, John Boehner, the House speaker, issued a statement saying there would be no vote on Thursday night on the Republican "plan B," as planned. The failure to hold a vote - after a desperate arm-twisting campaign by Republican leaders - marks a serious miscalculation on the part of Mr Boehner, who hoped the measure's passage would increase his leverage in talks with Barack Obama. It now casts doubt on Mr Boehner's ability to muster support for any deal he might cut with Barack Obama, US president, leading to pessimism about the prospects for any agreement. If no budget deal is reached by January 1, the US will be hit by a series of $600bn in automatic tax increases and spending cuts next year, threatening a new recession. US equities futures markets dove sharply on the news. The White House said in response to the failure of the Republican plan B: "The President's main priority is to ensure that taxes don't go up on 98 percent of Americans and 97 percent of small businesses in just a few short days. The President will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy. The demise of plan B came towards the end of a week that had begun with widespread optimism over the prospects of a bipartisan agreement between Mr Boehner and Mr Obama to reduce the deficit and avert the fiscal cliff. Both Mr Obama and Mr Boehner had made significant concessions on both taxes and spending last weekend, narrowing their differences sharply. But they failed to close the deal, and Mr Boehner decided to take his chances and move ahead with a purely Republican proposal in order to exert more pressure on Mr Obama and boost his leverage. But the plan backfired, as conservative rank-and-file members balked at "plan B" - which would have raised taxes on income over $1m but extended tax rates for all other taxpayers. If it had passed, it would have been the first vote for a tax increase in more than two decades for House Republicans. Dan Pfeiffer, White House communications director, mocked the Republican turmoil in a tweet, a few minutes before the plan B vote was pulled. "Obama won the debate: A year ago the GOP wouldn't close a loophole for corprate jets, today they break arms to raise taxes on millionaires," Mr Pfeiffer said. Meanwhile, Mr Reid urged Mr Boehner to return to the negotiating table with Mr Obama. It is now clear that to protect the middle class from the fiscal cliff, Speaker Boehner must allow a bill to pass with a combination of Democratic and Republican votes, Mr Reid said. "Speaker Boehner's partisan approach wasted an entire week and pushed middle-class families closer to the edge," he said. But it is unclear whether and how Mr Boehner will re-engage. Earlier, Mr Boehner said Republicans needed to press ahead with plan B because Mr Obama had "failed to stand up to his party" in direct talks on a bipartisan deficit reduction agreement that appeared to be within reach earlier in the week. The embarrassing failure of plan B could raise speculation that Mr Boehner may see his speakership threatened when the new Congress is sworn in next month. Mr Cantor had expressed confidence that there would be enough support for "plan B" among rank-and-file Republicans to pass the legislation, despite the conservative unrest. The White House had threatened to veto the bills, and Jay Carney, Mr Obama's press secretary, lashed out at House Republicans during his daily briefing, calling plan B "a multi-day exercise in futility at a time when we don't have the luxury of exercises in futility." "We're not taking up anything they are working on," said Mr Reid, calling it a "pointless political stunt" and a "non-starter."