WASHINGTON – The nation averted an economy-crushing combination of tax hikes and spending cuts late Tuesday when the House overwhelmingly approved legislation pushing the nation back from the brink of the “fiscal cliff.”
By a 257-167 vote, the House approved legislation that the Senate had approved about 21 hours earlier to repeal tax increases on most American taxpayers that took effect automatically at the turn of the new year.
An unusual coalition consisting of most House Democrats and a few dozen Republicans pushed the measure to passage in the GOP-controlled House – which, for years, had refused to consider legislation that a majority of Republicans did not support.
The vote not only split the Republican caucus, it also split the GOP leadership. House Speaker John A. Boehner, R-Ohio, and Budget Committee Chairman Paul D. Ryan, R-Wis., voted for the measure. House Majority Leader Eric Cantor, R-Va., and Majority Whip Kevin McCarthy, R-Calif., voted against it.
But the measure came as a big victory for President Obama, who campaigned for re-election calling for higher taxes on the wealthy, a key element of the bill.
“Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up,” Obama said in a late-night appearance at the White House after the bill passed.
The House vote came after a dramatic day of waiting and strategizing for the GOP majority, which ended with a simple recognition of reality.
“I was disappointed that the bill doesn’t deal with the debt and spending crisis in America, but that will have to wait for another day,” said Rep. Tom Reed, R-Corning, who voted for the bill.
“The upside of this is that it cuts taxes for 99 percent of the people in my district.”
The measure came to the floor for a vote after the Republican leadership failed to win enough support for an amendment that would have added spending cuts to the legislation.
That amendment was an attempt to satisfy many House Republicans who complained that the Senate bill was yet another tax-and-spend measure.
“We’re taking up a bill that will not do anything to cut spending,” said Rep. Louis Goehmert, R-Texas.
Cantor said he, too, was uncomfortable with the measure.
“I do not support the bill,” Cantor told reporters.
“We are looking, though, for the best path forward.”
That path at first seemed likely to feature a spending-cut amendment, but enthusiasm for that addition faded amid signs that the Senate would not reconsider the bill if the House were to change it – meaning that the bill would die and that the nation would fall off the fiscal cliff.
What’s more, the 112th Congress was running out of time to solve the fiscal cliff problem.
The old Congress ends and the next one begins at noon Thursday.
If no deal had been passed by then, the Senate bill would have died and new fiscal cliff legislation would have to be passed by the new Congress, which will feature a larger Democratic majority in the Senate and a smaller GOP majority in the House.
“I was open to a [spending cut] amendment,” said Reed, a member of the tax-writing Ways and Means Committee. “But in the end I just came to the realization that we’re out of time, and we need to govern.”
For their part, House Democratic leaders voiced their support for the Senate bill.
“I think that we’ve made gigantic progress and I hope we can have a bipartisan agreement as we move forward,” said House Minority Leader Nancy Pelosi, D-Calif.
The day of dramatic waiting in the House followed a 2 a.m., 89-8 vote Senate vote Tuesday in favor of a fiscal cliff deal hammered out by Vice President Biden and Senate Minority Leader Mitch McConnell, R-Ky.
That deal will keep tax rates steady for most Americans, while increasing the rate on individual income of more than $400,000 and household income of more than $450,000.
The tax rate on those incomes will rise to 39.6 percent, from the current 35 percent.
At the same time, though, all taxpayers will have to pay higher payroll taxes under the deal. A two-year, 2-percentage point reduction in the payroll tax was allowed to expire, boosting the rate back up to 6.2 percent.
In addition, the deal boosts the tax rate on dividends and capital gains from 15 percent to 20 percent for upper-income earners, preserves the child tax credit and a credit for college tuition, and fixes the alternative minimum tax so that 30 million Americans won’t have to pay it.
The bill also extends unemployment benefits for 2 million Americans, preserves Medicare payments for doctors, and fixes federal dairy policy to prevent a sudden spike in milk prices.
Even though the bill included all those popular measures, it found little love among members of either party.
“Virtually no one believes what we have before us tonight is a long-term solution” to the nation’s fiscal problems, said Rep. David Dreier, R-Calif.
Rep. Brian Higgins, D-Buffalo, supported the bill, as did Rep. Kathleen C. Hochul, D-Hamburg, who said it’s “disgraceful” that it took Congress until New Year’s Day to pass it.
“I’m voting for it to put this behind us and so that we can allow the markets to open tomorrow without the sword of Damocles of a new recession hanging over us,” she said.
In addition to saving most Americans from dramatic income tax hikes, the bill also puts off for two months a series of draconian spending cuts that most lawmakers wanted to avoid. Equally split between defense and domestic programs, those cuts add up to $1.2 trillion over 10 years, including $109 billion this year.
But in delaying those cuts, the fiscal cliff legislation sets the stage for Congress to again consider those budget reductions at the same time, as it will have to vote on raising the federal debt ceiling as well as a six-month spending bill for the rest of fiscal 2013.
That being the case, “the legislation before me is no great victory,” said Rep. Louise M. Slaughter, D-Fairport, who supported the measure. “It’s only a partial answer to a much larger problem, and it sets the nation up for another fiscal showdown in mere months.”
News wire services contributed to this report. email: email@example.com