WASHINGTON (AP) — Squarely in the spotlight,
House Republicans were deciding their next move Tuesday after the
Senate overwhelmingly
approved compromise legislation negating a fiscal cliff of
across-the-board tax increases and sweeping spending cuts to the
Pentagon and other government agencies.
House Speaker John Boehner met with
rank-and-file GOP lawmakers to gauge support for the accord, and an aide
said GOP leaders
would not decide their course until a second meeting later in the
day. That suggested that House voting might not occur early.
Vice President Joe Biden tried selling the
deal in a separate closed-door gathering of House Democrats. Biden was
reprising
his role of Monday night, when he pushed Democratic senators to
back the agreement that he and Senate Minority Leader Mitch
McConnell, R-Ky., had brokered hours earlier.
In a New Year's drama that climaxed in the middle of the night, the Senate endorsed the legislation by 89-8 early Tuesday.
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.
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.
Boehner, R-Ohio, pointedly refrained from endorsing the agreement, though he's promised a vote on it or a GOP alternative
right away. The exact timing of the vote was uncertain.
As the House staged a rare New Year's Day session, it was clear that there were divisions among lawmakers from both parties.
Rep. James Moran, D-Va., called it "a bad deal for America." Rep. Jason Altmire, D-Pa., said approving it would "show the
American people that this Congress isn't broken."
Rep. Darrell Issa, R-Calif., said that while he might vote for it, "I won't do it thinking we've accomplished anything here
today, other than the smallest finger in a dike that in fact has hundreds of holes in it."
Leaving the meeting of House Democrats, Rep. Elijah Cummings, D-Md., expressed support for the agreement.
"I am one of the most progressive members and I'm going to vote for it," he said.
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.
Allowed to lapse was a 2 percentage point
cut in the Social Security payroll tax first enacted in late 2010 to
help prod consumer
spending and goose the economy. It meant an extra $1,000 in the
wallets of typical families earning $50,000 annually.
An extension of the cut — which temporarily reduced the tax to 4.2 percent — lacked strong support from both parties, including
the White House.
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.
In the Senate, three Democrats and five Republicans voted against the legislation.
"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.
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.