Any news on Plan C?

The Speaker of the House of Representatives, John Boehner, surprisingly abandoned an alternative US budget proposal on Thursday night, saying that he didn't have enough votes to support it.

Boehner's "Plan B" proposed increasing taxes only for those earning more than $1 million (757,000 euros) per annum, as opposed to the $400,000 threshhold advocated by President Barack Obama.

The development scuppered an opposition bid at offering an alternative approach. Obama's preferred solutions were not to Boehner's taste, and are themselves almost certain to be voted down in the Republican-dominated parliament.

The US therefore remains deadlocked on its tax code and spending for 2013, with days left to reach a deal.

'The fiscal cliff'

It's been dubbed the "fiscal cliff," presumably in a bid to lend some drama to spending and taxation policy. A series of US tax cuts introduced by George W. Bush, and once extended by President Obama, expire at the end of the year.

This, coupled with the introduction of spending cuts designed to rein in the US deficit, is seen as a danger to the fragile US economy - a measure that might push the country into recession.

Both parties want to amend the impending changes, but they disagree on how to do so. In broad strokes, the Democrats want to protect more public spending at the expense of higher taxes for the highest-paid, while the Republicans are seeking the reverse.

A compromise deal is still likely, but will have to be reached in a hurry.

Congress has now left for its festive break, though it could return for emergency talks as early as December 27.

msh/rg (AFP, dpa, Reuters)