Alexander, Corker vote 'Yea' as Senate clears fiscal cliff measure; House up next
From Staff and Wire Reports
WASHINGTON -- Squarely in the spotlight, House
Republicans planned a closed-door meeting Tuesday to decide their next move 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.
In a New Year's Day drama that climaxed in the middle of the
night, the Senate endorsed the legislation by 89-8 early Tuesday. That vote came 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.
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.
Tennessee Sens. Lamar Alexander and Bob Corker, both Republicans, voted in favor of the measure.
"This agreement rescues 99 percent of Americans from individual and estate tax increases in 2013, and then makes these lower rates permanent, providing certainty and creating jobs," Alexander said in a statement following the vote. "But the Medicare fiscal cliff is still ahead of us, which is why Senator Corker and I have a proposal to deal with the out-of-control spending that will soon bankrupt the programs seniors rely on to pay their medical bills. If we don't deal with this during the debt ceiling debate, we are on the road to becoming Greece."
House Speaker John Boehner pointedly refrained from endorsing
the agreement, though he's promised a vote on it or a GOP alternative right away. But he was
expected to encounter opposition from House conservatives, and it was unclear when the vote would
occur.
Boehner planned to brief his caucus in early afternoon Tuesday and
Biden scheduled a separate meeting with House Democrats to reprise his role of Monday night when
he promoted compromise to Democrats before that chamber voted.
Boehner
and House Majority Leader Eric Cantor, R-Va., arrived at the Capitol in late morning, and both bid
"Happy New Year" to greeters but didn't say anything substantive about the Senate-passed
bill.
One of the more conservative House Republicans, Rep. Tim Huelskamp,
had no such reticence to speak.
"It's three strikes in my book and I'll be
voting no on this bill," he told CNN Tuesday morning, saying the legislation would impose a
hardship on small businesses around the country and falls short of addressing the need for cuts in
spending.
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.
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.
"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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