Vote on a measure he thought could be a good titfortat against the president. At issue, a measure that would keep tax rates the same, for better than 99 of americans, only raise them for those earning a mullion bucks or more, it looked like it was coming together, until it was not. A number of particularly conservative Tea Party Members of that Republican Caucus abandoning the speaker saying, no way in heck i could vote for this. He could live with losing maybe 20 votes, then is started accelerating, then it started to look like a vote that was supposed to embarrass the president to turn around and embarrass the speaker, right now the speaker having to shelf the vote for now, peter barnes live on capitol hill capito. We just learned they are cancel anything vote for tonight, republicans called an emergency meeting after it became clear, to gel, that the speaker would not have the vot votes. For the plan b that Speaker Boehner was pushing, they had a emergency Conference Meeting that started around 7 45 eastern time, and majority leader, saying no vote tonight, the house said it plans to stay in session through the weekend if necessary to try to get something done. We assume they will keep working on it. Neil. Neil as you were speaking. We got an indication, no word this week they will sell this off until next week, now calendar works behind not only the president but again the president , and against avoiding this cliff what now . Reporter this will change the dynamic. The thinking is that the speaker needed to eke out at least a narrow win tonight. Maybe by 2 or three votes to say to the president , looking i just barely passed a tax increase for millionaires, and you are asking me to try to pass a tax increase on people who makeover 400,000 a year. Aint gonna happen, but the other side, if the speaker did not get the vote, it would weaken him in his negotiations with the president going forwa forward. Maybe would have to go off the cliff to get a deal. Neil interesting you say it would show to the president , for the president , how difficult Speaker Boehners job is. He is trying to get some sort of a deal going through a republicandominated house. Not as republicandominated in sink as you would think, it is heavy lifting. Heavy lifting at a million bucks or over, i would imagine it would be heavy liftingal 400,000. Reporter that is the political optics. But the president was looking for some assurance from the speaker that he could deliver some votes for some deal at some point. If the speaker could not, then again, go off the fiscal cliff to try to get something done in the new year, to avoid all of the tax hikes, and the big sequester. Neil peter great reporting, we will be returning to you. The great vote we were all waiting for, i guess the equivalent of remember, apollo 13, houston, weve got a problem. Washington we have a very big problem. Not voting on plan b. It must have gone behind the 20 votes that were expected to be lobbed off from Speaker Boehners cotroying get that. It makes you wonder how many were part of this avalanche that told the speaker, no way in heck were going for this. Have is the stance were looking at. It will not be resolved tomorrow. This week. Or next week. Because remember, you have christmas next week. Chances are, knowing these guys as i did do, they will not be keen to work christmas eve, and christmas day, that takes us to next wednesday, only a little more than a week ahead of the government possibly hitting a cliff. Are you surprised . Not at all. A great tragic comedy, neil, they will keep you in a job for the rest of your life reporting on that. Neil i am not too shocked. I thought this dismissive you, that house leadership had of their rumbling ranks they would swallow this, i didnt see it, a lot of these tea party congressmen, 80 some odd that help propel john boehner to speaker got alleged against having to do the got elected to do against the very thing they were called on to do, vote for a tax increase. They could not swallow it. And not see any decrease in spending, you know the definition of this problem is we have a tril don dollar deficit, lets cut it down, neither side is approaching that topic effectively. Neil i have talked with a few tea party types. Who said, neil, i would have gone along with this, and would go along with this, if i saw you know a return. Or something for the pound of flesh i was offering. That democrats would put on the table real cuts, not just warmed over cuts from the last agreement almost a year ago. They didnt do that so our hineys were exposed and were proposing tax hikes and getting something in return. Forget it, the hell with it. I was in munich, germany, this week, talking with business executives, the germans thought we were crazy. Only people not watching this charade in u. S. Is the french, they are looking to get out of france because of the tax rate there. The they said only thing france will export in 21 century are millionaires. Neil they all go to belgium, it is obviously for more than just the chocolate. So, where do we stand . The markets have been nearly, if not dismissively going by all this and through all this, assuming i think that a teal would be had a deal would be had. Tomorrow it looks like a deal will not be had, the they mas have turned sharply lower, 74 down in the futures. I am wondering, if that is a signal they could worry this is not a fore gone conclusion, we could go into the new year with no deal. Im thinking, increasingly, that sequestration and going into the new year without a deal is the best possible thing for the u. S. , it is the only way you will see spending decreases. You will get revenue increase on top. But hopefully, they will be in better balance, and president and administration are promoting today. Neil knowing you were coming on, craig, i was reminded by fedex, in its warning yesterday. Normally when we see International Companies like your old haunt, come out and talk about headwinds globally, rarely did they address headwinds here. Fedex said you know were not honky dory how things are going in this country. That was going apart from the whole cliff issue. They were concerned, that if fedex had a slowdown here. Does this accelerate that talk . I think so, you see the retailers, you know have fantastic discounts to try to move products. They are having problems, if fedex sees challenges that means the whole retail, and christmas sector are you know, pretty dismal. I really think the Business Community though is looking for a balancing of the budget. I think that the trillion dollar deficit is the big bugaboo for the business industry, they are not seeing any movement in washington d. C. To take that deficit down appreciably. I think they will go into hibernation, just because of that. Neil you were very pressing on this. Sure enough, a lot of what you feared or maybe in this case highway patrolle hoped for, i think it was your view a bad deal would be better, craig thank you very much. If i dont speak to you again, try to have a Merry Christmas and a happy new year. Well, i hope you get enough, news to report in the next couple of days, neil. Neil i have a filing i will. A statement were getting from Speaker Boehner, the house did not take up the tax measure today, because it did not have sufficient support from our members to pass. Now it is up to the president to work with senator reid on legislation to avert the fiscal cliif, the housing already passed legislation to stop all january 1st acts rate increases and replace the sequester with responsible spending cuts that will begin to address our nations crippling debt. The senate must now act. Let me cut to the chase, what he just said i cant rally my troops mr. President , maybe you can yours, in a word, yikes, more after this. Whats next . Hes going to apply testosterone to his underarm. Axiron, the only underarm treatment for low t, can restore testosterone levels back to normal in most men. Axiron is not for use in women or anyone younger than 18. Iron can transfer to others through dect contact. Women, especially those who are or who may become pregnant, and ildren should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these signs and symptoms to your doctor if they occur. Tell your doctor about all medical conditions and medications. Do not use if you have prostate orreast cancer. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or iitation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. See your doctor, and for a 30day free trial, go to axiron. Com. Neil we let you decide . Do you think this have a impact. Look at dow joan futures dow jones futures, cascading down as soon as word hit, they are shelving that vote. It was not to be, they had to shelf and cancel the vote, because the vote simply were not there. They could gloss over it anyway they want. But even speaker bainer in his statement, intimating the overall support from his troops was not there. It is fair to say more than 20 that he could risk losing before he would start looking very embarrassing. Not to be. Now they are looking at reconvenes next week, after christmas. That would leave 6 days to the end of the year, even allowing for fact they can change their own rules. You know try to cobble together quick conference times, markup times for bills, votes in and out of the senate. And fax to the president in hawaii. You could do calendar map as much as i can, it gets to be unlikely and darned near impossible. And for the former u. S. Controller general david walker, it gets worrisome. It looks to me a chance of showing some semblance of order that gone out the window, what now . There is a reason it was called plan b. What we need to do is pursue plan a. We can still have a chance to get a plan a. But to get a plan a, the president has to be more forth coming with regard to spending reductions. What needs to happen is we need to be able to avoid the fiscal cliff. Have a meaningful down payment on revenues and spending reductions, including mandatory spending and build a bridge to get a grand bargain in 2013. The conservatives are out of touch with reality, if they think that taxes are not going up for people over a Million Dollars, the real problem is we have to do more on the spending side. And the president has to be more forth coming in that regard. Neil very well put. You harken back to something i heard from conservatives, they could have swallowed the taxes going up on millionaires even though it was against their inner core. But they saw no quid pro quo. They did not see anything approaching real spending cuts. So they just said, the hell with it. How do you win those guys back . Im talking among the republican troops, who were entary aning and willing to swallow their pride if not their dogma and raise taxes on a very small group, if they see those spending cuts. You need to have more spending reductions. You should not count interest as a spending reduction, most of interest saving is from tax increases. In addition we need to look at mandatory spending. For example premium subsidies for medicare, 95 of people into voluntarily sign up for medicare get a 75 premium subsidy, irrespective of their income. Neil you have Congressional Black Caucus and 80 other prominent democrats saying do not touch it, do not address it. It is like their head is in the hand. It is not as if americans were not asking for them to get spending under control, including on entitlements. Look, the america the peopley a significant majority, the problem is a spinning problem. But not ex blessively a spending problem. They have come up with comprehensive plans that rely on spending reductions than tax increasing overtime, they achieve the spending reduction through comprehensive Social Security reforms and tax reforms, to get the revenues that is the pathway forward. And but again, i think we have to be realistic, we dont have a lot of time left. Letfocus on what we need, avoid fiscal cliff, a credible down payment in regard to revenues and spending, it has to have a more spending element than we see right now. And targets, spending in revenues to achieve a grand bash an next year. Neil thank you very much, wall street is giving up. Dow futures off almost 300 points, if you are getting a sense of de. Deja vu you are not alone. Remember when they rejected tarp 1, it was shot down, and stocks went way down, the dow tumbling better than 770, Congress Quickly reconvened, took out there are tarp vote to avoid door dow fall off, it was thought it safi the day, what happened, the dow was 4,000 points lower. That is the thing about marching to the markets drum. It will killia either way, Immediate Response from wall street, you are ta pathetic fools, we have lost confidence in you, were selling and were getting out of dodge, get ready, it gets worse. Neil a snapshot. The immediate reaction, if you judge the futures market, as anything of substance, it is really not. It does not necessarily convey what is happening in the cash market when we resume trading. The fact of the matter is, this is something very few in the Financial Community really expected. Possibility that we would take this to the brink, we would fall you of a proverbial cliff. But right now looking a lot more possible, possible, not likely, given the fact that republicans had to pull a measure for which speech issue thought he had close among republicans, that would have gone ahead, and hiked taxes on only millionaires, but kept them at their present rate for everyone below. It looked like a slamdunk for a while. Anything but today. Votes were not there the speaker shelved it, they are not convening in any ernest sense until the day after christmas. And here we be. Congressman keith elson, minnesota congressman. He was against keeping entitlement cuts off the table. A lot of folks are doing second guessing, what led to this . Many argues that the democrats resistance to the entitlement cuts killed it, what do you think . I think that is ridiculous. We are talking about Social Security beneficiaries thank is 65 years old, we say these folks who did not cause this massive deficit should not be the one that pay for it. Neil leave Social Security out of it, what about medicare, and medicaid. Beneficiary cuts are not warranted, there are other ways to save in medicare, lets put out for Competitive BiddingPrescription Drug program, do Competitive Bidding, that would have saved something to opportunittune ofsthere are wit 150 billion right there. Neil outside of that. Republicans came back, even those who considered an increase in taxes on millionaires today, were against doing it because they didnt see anything in return from your side, what do you say . I say that is a total copout. Here is the thing, we were working on plan a, that was the white house, and other leaders, negotiating with the house leadership, mr. Boehner, and it looked like you know boehner throws up a million, obama guess to 400,000, it looks like issues are narrowing, they go from plan a to plan b, nothing more than a fantasy wish list, no democratic participation, then they put that up on the floor today, and they cant come back and put the Million Dollar one up, i was getting ready to show up for that. We had no amendment to say let taxes go up on folks over 250,000, i was going to vote yi was going to vote no on Million Dollar one, but no one is america expects members of congress tosurrender their death deeply held view points. Neil you might be right. But this is how it looks to the very money focuse focus guys onl street. You are add pan adamant about ct on entitlement, and republicans are ad adamant about not increae tax hikes, and after this tonight, it looks like you are narrowly Holding Hands off a cliff . Let me tell you, me and nick mill veiny of South Carolina got 22 members of congress, we got a letter together to agree on sensible cuts in defense area that would not undermine our nations security that is democrats and republicans coming together for things that make sense, and they are cuts, right . Neil do you think there will be more of an appetite or less come wednesday. I dont know. Neil and for republicans, to entertain more beyond what they offered, i dont see it. You mentioneed mentioned 200. It is funny how a lot of people after they went home and heard from their communities, came back and switched their vote to yes, maybe that will happen neil. Neil it is going to take a tanking market to do it though, isnt it . It will take angry constituents to do it. They take the positiin they want us to come up with sane, sense incompromises, i am proud to be a liberal and a liftist, i am not going to like everything in the deal, people on the right are not going to like it. But we have to come up with something for the sake of the American People, im not asking them to surrender their death penaltildeeplyheld views, i thit constituents will let us get an earful. Neil i suspect you are right, you had a crazy night we appreciate your time thank you. Any time, neil. All right. Here is where we be. A selloff ensuing. This is deja vu, this markens back to harkens back to 2008, and that failed tarp vote, were off or worse levels, people may reassess this, and say they have to avoid this debacle and come back to speak. What about the speaker of the house . Did he tonight, with this valued and now shelved vote, lay the ground work for his own demise . Is Speaker Boehner on the verge of becoming former Speaker Boehner . The guy who is leading the charge, and he is a republican. [beep] [indistinct chatter] [kids talking at once] [speaking foreign language] [heart beating] [heartbeat continues] [faint singing] [heartbeat, music playing louder] im feeling better since you know me i was a lonely soul, but thats the old me. Announcer this song was created with heartbeats of children in need. Find out how it can help Frontline Health workers bring hope to millions of children at evybeatmatters. Org. Neil all right, if you are Speaker Boehner, you dont relish moments like this. But he did admit he just did not have support for a plan b to throw back at the president , saying look, im trying to do something. Ive got my members on board with raising taxes at least on millionaires, that is what i can do. Lets have at it what you can come up with . But they didnt. For that, they dont like a speaker who was bolted from party dogma. Ron, what does this mean, for Speaker Boehner, it Never Looks Good to lose support of our troops, not to say he is in deep trouble but he is in trouble . He is in trouble. His speakership is on the ropes this shows that conservatives and conservatives in house are not willing to put up with someone who will go out to public and advocate for tax hikes, the solutions he has been offering will kill jobs for young people, and leave us a lot of debt in future, make it to where people my age have to live their prime year paying half their income in taxes, we cannot have that any longer, conservatives stood up, and everyone called us crazy saying there is no way this is not going ta pass, guess what he did not have the votes, a tax hike is not going to pass, we have principles and were fighting for them. Neil even just millionaires . A tax hike, any job creator, why would we take money away from people who will employee biogenration, youth. Is still off of the charts, were under employed i have friends who are looking for job, how about talking about tax 1991, and we got more revenue. Neil and reagan also raised taxes. Were asking you at the time he raised taxes he felt he got a deal on the democrats part to cut spending. Which never happened. Neil you are right. Very good insight. And i think now, that is what really stuck in the craw of a lot of your conservative colleagues, some would have entertained this tax hike but they did not see that quid pro quo they just walked away. This is sa blow, everyone kns this is not going to pass. And so what we should do is starting and pressures president obama for a point of principle, saying actually, this is what is going on fix the economy, offer a positive solution up front. You can compromise in the back smokey rooms of boehners was on the, but when you have a microphone in your case, make a case, take the advantage of actually making a case to the American People on why we should to solve the problem right now. Neil do you feel that way about those who signed on to the speakers plan . A agreed . You know, Speaker Boehner has a lot of pull on a lot of people but not a lot of pull on everyone. Neil those other people, that i mentioned would you be again them becoming speaker . You know that is not the case, it is a case by case basis. It has to be someone would be serious about the debt problem. Not someone with a planned budget in 2040, it has to be sooner rather than later, otherwise we should not be taken seriously. Neil ron thank you very much. Thank you, neil. Neil as ron was speaking, a quick look at futures, it is in and around its down 200 level, about 1. 5 . Similar percentage downdraft in s p, and nazdaq. Now, futures i stress are a snapshot, and a momentary one, they can quickly change as people reassess or begin to think maybe this not as bad as we thought, a lot could hinge on how asia trades and europe trading after that. But with much of the western arms in particular europe, buying is going to get light approaching christmas holiday, a lot of people are heading out. Which is why republicans have said, you know well regroup, gather our marbles, and see you next wednesday. Not good. More after this. Neil you are looking at the usa capitol right now. We have to go through ma maching a right now, see who this hurts more. If republicans could not pass a measure that would raise taxes on only millionaires, what would it take . Republicans say it would take a pound of flesh in return. Cuts, and substantial cuts. On the part of democrats on spending. They do that, we might be able to rebuild this. But time is awasting, former Federal Reserve governor, uncertainty kills the economy in the meantime. How bad do you think that impact gets longer this drags on . Just think about people who might want to invest firms, entrepreneurs, when they see these antics in washington, they just say no. They dont have the confidence to be able to say, i know what my taxes are going to look like. I know what sort of services im going to get, they say, im not sure, they pullback. This jeopardize the the job creation machine that makes america great. Neil they seem to be onee, that buying up the mortgagebacked security and bonds to keep Interest Rates low, some argue after thartificially low, but ts that seems to be the only one doing anything deemed semi constructive. I think you are right, ben bernanke and colleagues are trying to take the longer term view, whats necessary to get the economy going, we need to have a revival in the housing market. They have been laser focused to making sure housing is more afart be on, in most affordable. In most areas of country were seeing revival of this market, not necessarily chicago. But this not sufficient, with this uncredible uncertainty about tax rates and spending that will hold the economy back no matter how much the fed trying. Neil do you worry that a recession becomes more likely if this drags into the new year . Not whether we cobble together a deal. But whatever we do, might be a bad deal. That it sets in stone something that could really rock the economy . Hopefully they will try to avoid Something Like that. I agree, if this is not a good deal, if it is just a deal for deal sake. We have very high taxes to corporations and capital and investment, that is not going to get the economy moving, that is what we need to do. I hope they can both get a dial, a good deal that can get us back to track where we should be. Neil you know, randal, you remind me, tea have talked we have talked over the years about how market could have an impact on the fed, and those folks in congress, if there is a big selloff tomorrow. If it echoes the futures, that will compel them to get their hineys back and do something or maybe not . It sends a real warning signal to the members of congress. I remember i was at Federal Reserve we had vote ont. A. R. P. Legislation that first failed, then the dow and s p fell by 7 or 8 , some members changed their votes, they realized, maybe this is going to provide support it main street, it may not be such a terrible thing. As far as taxpayers, most of these have paid off well to the taxpayer. Neil there is a benefit, i know that sounds like twisted logic, but there is a benefit to a huge market selloff, it provides cover to wimpy politicians. It does, i really wish we did not have to go to the cliff to do these things, that is fragile. You dont want to take these risks, because sometimes you cant come back, we came back from the depth of 2008, hopefully we come back here, this is not a political game. These are peoples savings, these are incentives for investment. This is what can help to create jobs, or can destroy jobs, much more than any particular government program. Neil very good, randal thank you. Great to see. You futures selling off, but not asoff, but very volatile. I dont want to over abscess about them, but over obsess about them. And they are each retreating to their dogmatic corners, and folks on corner of wall and broader saying, a pox on both your houses. Neil all right, its a mess. That is one way of putting it. For both republicans and democrats. Are they further away from a deal . Who gets the blame if they get no deal . Do we go over the cliff, armageddon and the mayan end of the world thing tomorrow, maybe this is a moot point, because we dont really have to worry about it. Numbers me, b abe and deedee. I think we need new leadership, right now this is a team, sort of a time, but a team that failed last time, were here again, they dont play ball well together. I just think lets go over the cliff, see what happens, every time we talk about a deal, it does not happen it moves it forward a month or two and are it stays in the same place. Neil you are forag armageddon . And the mayans are too, so lets party. The timing is perfect, they knew the fiscal cliff was coming. Neil i could say, do politicians know or appreciate this could risk all their demise, if america just throws therstheir hands up and there ia big market selloff. If there was anything real to this plan b at the outset maybe. This is silly. It was doomed from the outset, you have to know this. Neil this is the strategy. A bad one. Neil no, no, the speaker was going to try to say, mr. President , i ave a tough enough time for these guys to agree on taxes on millionaires how do you think i would sell to 400,00400,000. You help me. There is a problem with that strategy, there is a small group of voters in house, democrats. Neil the ones who have not offered anything in return. That may be. Neil what . That is like saying yes there was an iceberg, but the captain hit it. Speaker boehner could not afford to lose more than 55 votes, he lost more, that leaves a lot of republicans i could he goes. He should. Neil you should be worried about the replacement, he might be sharper to the right. It will be. Kevin mccarty. Neil it entrenches no getting done stuff. I agree he goes, but he will make a deal before. This sounds almost silly, they are only a couple hundred billion dollars apart. Neil you think these cuts are not warmed over leftovers . They are not. Lets be fair. Doing the chain cost of living index is not chump change. Social security you are right. I understand that you would not be happy about counting interest real save, i get that. But let me you would not be happy if republicans counted projected revenue you get out of growth. Im with you, my question, and by the way, as you know we talked about this before, i am prepared to put medicare on the table. You are the only one. I dont vote. Neil deal or no deal. A deal. Neil what do you think. No. Mayans are right, party tonight. Neil assuming we get past the end of the world tomorrow, peter barnes on what we do, i dont know the day after tomorrow. Neil wait until after christmas. With the deal that is not a deal. Peter barnes checks the pieces and what happens next. Wait to until after the new year. That is what i am picking up from House Republicans and democrats. They think it is too hard. They think we may go off the cliff and january 1st they may be back on the second swearing in the new congress and january 3rd. They have to try to deal with it. Neil so the bush rates expire for everybody. Then they raise taxes on everybody . No extension and . No. Not without congressional approval. 11 days before the end of the year we have seen last minute deals come together but not a sense of optimism. The treasury secretary can order the Internal Revenue service to continue to withhold