SunTrust: 'Plan B' Financial Loser
The broad indexes all saw 1% declines, after Speaker of the House John Boehner late on Thursday gave up on his "Plan B" bill to raise taxes on couples and businesses earning $1,000,000 per year while extending tax cuts for all other U.S. taxpayers, saying that the House of Representatives "did not take up the tax measure today because it did not have sufficient support from our members to pass."
Boehner said it was "now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff," as the house had "already passed legislation to stop all of the January 1 tax rate increases and replace the sequester
President Obama last week signaled his willingness to limit tax rate increases to couples and businesses earning $400,000 or more, moving up from his previous insistence on raising rates for couples and businesses earning $250,000 or more. With the Republican majority rank and file in the House making clear their unwillingness even to raise tax rates on the highest earners, it would seem highly unlikely for Senate Majority Leader Harry Reid (D., Nev.) to come up with a compromise that could be accepted by the House and the president.
Reid said late on Thursday that "Speaker Boehner's partisan approach wasted an entire week and pushed middle-class families closer to the edge. The only way to avoid the cliff altogether is for Speaker Boehner to return to negotiations, and work with President Obama and the Senate to forge a bipartisan deal."
Boehner on Friday said at a press conference that "Republicans don't want taxes to go up. But we only run the House, the Democrats continue to run Washington."
The Speaker added that President Obama's proposed spending cuts "simply won't do anything to solve our spending problem. He wants more spending and more tax hikes that will hurt our economy. And he simply won't deal honestly with entitlement reform and the big issues that are facing our country."
Boehner did say that he would "continue to work with our colleagues in the House and the Senate on a plan that protects families and small businesses from the fiscal cliff."
Among the "big four" U.S. bank holding companies, Bank of America (BAC) fared the worst, with shares down 2% to close at $11.29. The shares have returned 104% year-to-date, following last year's painful 58% decline.