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Partial bill passed early this morning, spending cuts deferred.


Posted: Jan 1, 2013

Fiscal Cliff Bill Heads to House for Approval

"It shouldn't have taken this long to come to an agreement, and this shouldn't be the model for how we do things around here," said Senate Republican leader Mitch McConnell, who negotiated the agreement with Vice President Joe Biden.

By ANDREW TAYLOR
|  Tuesday, Jan 1, 2013  |  Updated 5:02 AM CST
Fiscal Cliff Bill Heads to House for Approval

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U.S. Vice President Joe Biden arrives for a closed-door meeting with Senate Democrats to urge them to support a tentative tax agreement with Senate Minority Leader Mitch McConnell.

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Legislation to negate a fiscal cliff of across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies is headed to the GOP-dominated House after bipartisan, middle-of-the-night approval in the Senate capped a New Year's Eve drama unlike any other in the annals of Congress.

The measure cleared the Senate on an 89-8 vote early Tuesday, hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell of Kentucky sealed a deal.

It would prevent middle-class taxes from going up but would raise rates on higher incomes. It would also block spending cuts for two months, extend unemployment benefits for the long-term jobless, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.

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The measure ensures that lawmakers will have to revisit difficult budget questions in just a few weeks, as relief from painful spending cuts expires and the government requires an increase in its borrowing cap.

House Speaker John Boehner pointedly refrained from endorsing the agreement, though he's promised a vote on it or a GOP alternative right away.

The measure is the first significant bipartisan tax increase since 1990, when former President George H.W. Bush violated his "read my lips" promise on taxes. It would raise an additional $620 billion over the coming decade when compared with revenues after tax cuts passed in 2001 and 2003, during the Bush administration. But because those policies expired at midnight Monday, the measure is officially scored as a whopping $3.9 trillion tax cut over the next decade.

President Barack Obama praised the agreement after the Senate's vote.

"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," Obama said in a statement. "This agreement will also grow the economy and shrink our deficits in a balanced way — by investing in our middle class, and by asking the wealthy to pay a little more."

The sweeping Senate vote exceeded expectations — tea party conservatives like Pat Toomey, R-Pa., and Ron Johnson, R-Wis., backed the measure — and would appear to grease enactment of the measure despite lingering questions in the House, where conservative forces sank a recent bid by Boehner to permit tax rates on incomes exceeding $1 million to go back to Clinton-era levels.

"Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members — and the American people — have been able to review the legislation," said a statement by Boehner and other top GOP leaders.

Lawmakers hope to resolve any uncertainty over the fiscal cliff before financial markets reopen Wednesday. It could take lots of Democratic votes to pass the measure and overcome opposition from tea party lawmakers.

Under the Senate deal, taxes would remain steady for the middle class but rise at incomes over $400,000 for individuals and $450,000 for couples — levels higher than President Barack Obama had campaigned for in his successful drive for a second term in office. Some liberal Democrats were disappointed that the White House did not stick to a harder line, while other Democrats sided with Republicans to force the White House to partially retreat on increases in taxes on multi-million-dollar estates.

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The measure also allocates $24 billion in spending cuts and new revenues to defer, for two months, some $109 billion worth of automatic spending cuts that were set to slap the Pentagon and domestic programs starting this week. That would allow the White House and lawmakers time to regroup before plunging very quickly into a new round of budget brinkmanship, certain to revolve around Republican calls to rein in the cost of Medicare and other government benefit programs.

Officials also decided at the last minute to use the measure to prevent a $900 pay raise for lawmakers due to take effect this spring.

Even by the dysfunctional standards of government-by-gridlock, the activity at both ends of historic Pennsylvania Avenue was remarkable as the administration and lawmakers spent the final hours of 2012 haggling over long-festering differences.

Republicans said McConnell and Biden had struck an agreement Sunday night but that Democrats pulled back Monday morning. Democrats like Tom Harkin of Iowa said the agreement was too generous to upper-bracket earners. Obama's longstanding position was to push the top tax rate on family income exceeding $250,000 from 35 percent to 39 percent.

"No deal is better than a bad deal. And this look like a very bad deal," said Harkin.

The measure would raise the top tax rate on large estates to 40 percent, with a $5 million exemption on estates inherited from individuals and a $10 million exemption on family estates. At the insistence of Republicans and some Democrats, the exemption levels would be indexed for inflation.

Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.

The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.

Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.

Despite bitter battling over taxes in the campaign, even die-hard conservatives endorsed the measure, arguing that the alternative was to raise taxes on virtually every earner.

"I reluctantly supported it because it sets in stone lower tax rates for roughly 99 percent of American taxpayers," said Sen. Orrin Hatch, R-Utah. "With millions of Americans watching Washington with anger, frustration and anxiety that their taxes will skyrocket, this is the best course of action we can take to protect as many people as possible from massive tax hikes."

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Vote was 89-8 for, with some tea-partiers joining. - Maybe that's an auger for the House. sm

[ In Reply To ..]
Not holding my breath, but a week or two ago someone said Boehner's mainstream conservative caucus could join the Democrats to pass a bill over the tea partiers. At that time, the issue was reaching agreement with McConnell in the Senate before any Boehner action of this sort, and that's now been taken care of. ...?

Senate said there are spending cuts in the bill (sm) - Liars

[ In Reply To ..]
so far, several congressmen have not found them. If they are not there, they will vote no, but I don't know how many of them will do the same. Rubio and Paul, for 2.

*IF* senators said some spending cuts were there, who're - the more likely liars? Maybe Rubio and Paul? Come

[ In Reply To ..]
on. Think. This is headed for the House and more discussion. Of course a faction that disapproves is going to try to whomp up its base, and the ignorant of all persuasions or lack of them, in an attempt to scrape up any additional power it can. They're going to be working hard reminding all GOP reps coming up for reelection in 2014 that they'll have to face the wrath of the billionaire's club and their followers.

yup....the O got what he wanted - higher taxes on the rich

[ In Reply To ..]
but higher on the more rich than he is, of course, and NO spending cuts whatsoever! yup! that'll save the country for sure! Thanks O!

Oh, we want much more than just higher taxes on - the rich. Really. Run scared. :) nm

[ In Reply To ..]
x

Yup - Bill passed 89-8 with 3 not voting BUT and it's a big but - backwards typist

[ In Reply To ..]
according to the CBO, it ADDS another $3.6 TRILLION to the deficit over the next decade. Other individual, business, and energy tax extenders would add another $76 BILLION. The extension of unemployment benefits would COST roughly $30 BILLION, and the so-called "doc fix" would tally another $25 BILLION through fiscal 2022.

Those who voted no were:
Benntt, Carper (sp-can't read my writing!),Grassley, Lee, Paul, Rubio, Harkins, and Shelby.

So, all I have to say is they better come up with some spending CUTS within the next couple months or else we all should vote every single one of our so-called "representatives of the people" out of office on both sides.

I've been saying this exact - same thing all along

[ In Reply To ..]
that we should vote every single one of our so-called representatives of the people out of office on both sides! Nobody listened to me! Now here we are stuck in yet another dead lock and nothing getting resolved....ever. If the democrats want it, the republicans vote it down, etc. They cannot even agree to disagree and get ANYTHING done on time...ever. kick 'em out! all of them!

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