Last night, the House of Representatives declined to take up Speaker John Boehner’s “Plan B”—a measure that would have simply extended the Bush tax cuts on everyone who earns under $1 million annually, and put off the rest of the fiscal cliff issues off until a later date.

Up until, Boehner had been negotiating a deal with Obama, and doing a pretty decent job, from his point of view. He got Obama off the $250,000 benchmark for extending the Bush tax cuts, and up to $400,000. He got Obama to scrap his demand for a permanent debt-ceiling fix. He got Obama to propose a Social Security benefit cut, which has enraged progressives.

But in a replay of 2011’s debt ceiling negotiations, it became clear to Boehner he probably didn’t have enough votes to pass this “grand bargain” with a majority of his caucus behind him. So on Monday evening, Boehner phoned President Obama and said the House would take up the bare-minimum “Plan B”—which was meant to be a mattress on the ground for Republicans if no deal could be reached by January 1. They could say they still protected the tax cuts for most Americans, with a small concession to Obama’s position by not protecting them for people earning over $1 million.

House Republicans, however, proved unwilling to make even this tiny concession. While Grover Norquist endorsed it, many others—the Club for Growth, Redstate.com, the Heritage Action Fund—actively pushed for “no” votes because it still raised taxes. And in a contentious, closed-door meeting last night, Boehner’s members made it clear to him that he didn’t have enough votes to pass it. So he didn’t even put it up for a vote.  (During the meeting one Boehner ally stood and asked recalcitrant conservatives “how the hell can you do this?”)

This was already probably obvious, but after last night we now know it’s true: no deal can pass the House without significant Democratic support. The House Republicans will not agree en masse to anything remotely acceptable to the Senate and White House. The GOP line today, dutifully repeated as always by Politico’s Playbook, is that “Senator Reid and President Obama now have what they sought to avoid: responsibility for putting forward a plan of their own that can pass.” Ignore that—it just means that Democrats should put together a plan that the House GOP will accept, which is simply not going to happen. Obama will not cave to the Republican demand of no tax rate increases whatsoever.

So now Boehner has a choice. He can restart his talks with President Obama and fashion a deal that at least some of his party can swallow, and pass it with most of the Democrats and some of the Republicans. It’s not clear that deal will be any better than what Obama’s already proposed: the chained-CPI has inflamed progressive fury and probably represents the outer limit of what Congressional Democrats will agree to, if they even will at all. Pelosi says she can get Democrats behind that plan, though I’m not sure about that—Boehner was saying at this time yesterday that he had the votes for Plan B. The leaders always want the members to think they’ll be on the losing side if they don’t go the way leadership wants. Plenty of Democrats in both chambers have said they won’t support the Obama proposal, and MoveOn.org and the Progressive Change Campaign Committee are threatening to primary any Democrat who does.

But maybe Boehner can squeeze one more concession out of Obama, though it would have to be pretty symbolic to retain Democratic votes, and pass it out of the House. This is very risky territory for Boehner, however—if he openly bucks his base and negotiates a deal that more Democrats than Republicans agree to, he could be ousted as Speaker in January when the new Congress selects its leaders.

If he takes the other route, and stands by the will of his base, we’re going off the cliff. That then weakens the Republican position even further, because polls overwhelmingly show the public will blame the GOP for going over—a position no doubt enhanced by last night’s disaster in the House. Also, all taxes go up on January 1, meaning that Obama’s proposal to extend them above $400,000 is actually a massive tax cut.

No choice looks particularly good for Boehner right now. He closed this morning’s press conference with a brusque “Merry Christmas, everyone,” but it won’t be one for him.

But progressives shouldn’t necessarily celebrate. Having Boehner negotiate from a weaker position is good—though we likely can’t get back the concessions Obama already put on the table (which he definitely did too soon, by the way). And if Social Security cuts pass with majority Democratic votes, that’s both a moral and political disaster, as Digby notes. What’s also not good is if Boehner gets dumped in favor of a true hardliner. In that case, we might look back on the gridlock of the past two years rather fondly.

For more on John Boehner’s failed plan, check out John Nichols’s latest.