Some crazy stuff went down last night.
As I understand it, Boehner took the President's last offer - which was giving up too much anyway for a liberal/progressive point of view - to his caucus and they rejected it. The President and Boehner essentially had a deal but Boehner couldn't get his people behind it.
Boehner than abandoned the talks he and the President had been having and announced that the House would pass "Plan B", a bill that was essentially a GOP wish list, that would've been dead on arrival in the Senate, and that would've been vetoed by the President even if the Senate had passed it(which they never would've because it never would've gotten to a vote). It was pointless theater, but yt was a a guarantee that it would pass in the house, they had the votes. But Boehner tried all day to get the votes and couldn't, and after an impassioned last-minute meeting with his caucus last night to give one last shot to getting the votes, pulled his own "Plan B" from consideration due to lack of support, and the GOP all left the building and Washington for the holiday, saying they might be back after Christmas/before the new year. They might be.
This was hugely embarrassing for Boehner. His speakership could be in jeopardy, which some are speculating is exactly what Eric Cantor wanted, and that perhaps Cantor held votes back on purpose because he wants to be Speaker. I.E. Maybe Cantor stabbed Boehner in the back.
Anyway, where are we now? There are three options that I can see.
1. The President keeps trying to cut a deal with the House, which would involve possibly giving up EVEN more. This is a non-starter for most progressives. We're done with the Tea Party-led House GOP. We want to move on.
2. Boehner cements the end of his Speakership by screwing over his caucus, and working with Nancy Pelosi to use the House Democrats+a minority of the House GOP to pass the bill that already passed the Senate, which is what the President originally wanted and better than the deal the House turned down. Boehner would have to really screw himself for this to happen though.
3. We go over the cliff.
At this point, I'm not so sure 3 isn't the best option. The President is going to have to give up too much to get a deal done with this insane House GOP. I'm not holding my breath for Boehner to work with Pelosi. Going over the cliff results in the full expiration of the Bush tax cuts as well as big defense spending cuts, two things we would never get otherwise. The obstacle, of course, is entitlement cuts. But some speculate that if we go over the cliff, the public will blame the GOP, the President's hand will be even stronger, and he'll be able to get the GOP to both cave on tax cuts for the rich and take less in entitlement cuts.
If a miracle occurs and number 2 happens, I'll take it. If not, I think I prefer 3 to 1 at this point. Don't give them anything else. Don't reward them for their behavior.