- Elton John blasts Russia’s anti-gay laws during Moscow concert
- U.N.: Afghanistan slow to enforce law protecting women
- Heart cancels SeaWorld concert after ‘Blackfish’ documentary
- South Carolina sheriff refuses to lower American flag for Nelson Mandela
- South Africans hold day of prayer for Nelson Mandela
- Mandela not on life support in final hours, friend says
- Ukraine protesters topple, decapitate Lenin statue in Kiev
- Kim Jong-un’s uncle removed from North Korean state documentary
- Thailand crisis deepens as opposition quits Parliament
- Campbell Soup apologizes for SpaghettiOs’ Pearl Harbor tweet
Senate votes to avoid ‘fiscal cliff’
Congress careened over the edge of the fiscal cliff at midnight, but a solution was in the offing after the Senate voted early Tuesday to approve a deal that combined tax-rate hikes and new stimulus spending, along with a two-month delay of automatic spending cuts.
Democrats and Republicans linked arms and powered the bill through the Senate on an overwhelming 89-8 vote, sending the measure over to the House, where a final showdown looms, and where it could have a more difficult path.
Sen. Mitch McConnell said it was the best bill that could be written.
“The president wanted tax increases, but thanks to this imperfect agreement, 99 percent of my constituents won’t be hit by those hikes,” the Kentucky Republican said just ahead of the vote, which didn’t end until after 2 a.m. Tuesday morning.
An early estimate of the tax provisions found the bill amounted to a nearly $4 trillion tax cut when calculated over the next decade — all of which will be added onto the deficit.
House Republican leaders released a statement saying they are still considering whether to try to amend the deal or put it up for a vote as-in, and said those decisions “will not be made until House members — and the American people — have been able to review the legislation.”
The White House and Mr. McConnell, the top Republican negotiator, settled on the outlines Monday evening, and Vice President Joseph R. Biden visited the Capitol to sell the deal to reluctant Democrats, spending more than an hour with them.
Democrats emerged saying they weren’t happy with the deal, but most of them said it was the only option.
“For the first time in literally years, we have a major issue settled by bipartisan vote,” said Sen. Dianne Feinstein, California Democrat.
Some Democrats though, backed by liberal pressure groups, said their leaders caved on too many key issues. AFL-CIO President Richard L. Trumka tweeted that the deal “set the stage for further destabilizing hostage taking from Rs in the form of another debt ceiling crisis & another sequester crisis.”
The final sticking point was over how to postpone at least two months of those automatic spending cuts, or sequesters, scheduled to happen Wednesday.
Tax rates technically rose to their Clinton-era rates as the clock struck the new year, though taxpayers won’t see an immediate change. Still, unless Congress acts soon, the government will begin to withhold more money from future paychecks to reflect the higher rates, which will average about $3,500 per taxpayer in 2013.
In the absence of a deal, President Obama also is required to begin imposing the $110 billion in automatic spending cuts Wednesday.
Instead, they released a schedule that included a measure to head off a rise in milk prices in January thanks to Congress‘ inability to pass a new farm bill. Aides said the House might also take up a bill to provide relief for Hurricane Sandy.
The outlines of the deal Mr. McConnell and Mr. Biden worked out included raising tax rates for individuals making more than $400,000 and families with incomes more than $450,000, and extended unemployment benefits for the long-term jobless. It also continued a number of programs from Mr. Obama’s 2009 stimulus law, including tax credits for college tuition and for green-energy programs.
The deal included no net spending cuts, however, which left conservative Republicans complaining. Meanwhile, liberal Democrats balked at not holding firm on tax increases for families making more than $250,000 — a stance on which Mr. Obama campaigned.
Regardless of their income, all taxpayers will still see at least some tax increases with the expiration of the payroll tax holiday, which was worth about $1,000 to the average family in 2012.
In an early-afternoon speech at the White House complex, surrounded by those he said were middle-class taxpayers, Mr. Obama took a victory lap on the deal, pointing to the tax increases he won.
“Keep in mind that just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans. Obviously, the agreement that’s currently being discussed would raise those rates and raise them permanently,” Mr. Obama said.
He also said he had hoped for a bigger deal and said he will insist on more tax increases in the next round of budget fights, which begins almost immediately.
But his fiery speech left Republicans enraged.
Sen. Daniel Coats, Indiana Republican, said it reminded him of football players taunting their opponents.
“It’s in-your-face. It was demeaning. It was insulting. It was sad,” he said.
Republicans agreed with Mr. Obama that the tax deal marked a total win for the White House.
But he warned that this was just round one in what’s a much longer battle, and said round two is coming up in a couple of months when the Treasury Department once again bumps up against its borrowing limit.
Mr. Graham said he will not vote to give Mr. Obama another debt increase unless the president agrees to changes that reduce Medicare and Social Security spending, including limits on benefits.
“The next time we meet is going to be around the debt ceiling. And the image I want is not a bunch of people behind the president clapping for him, but members of Congress, Republicans and Democrats, clapping for the president,” Mr. Graham said.
The deal on the table late Monday included a patch to prevent millions of taxpayers from being hit by the Alternative Minimum Tax, and also included an extension of full payments to doctors treating Medicare patients.
The tax rate agreement would see the top marginal rate rise from 35 percent to 39.6 percent — the rate during the Clinton years — for individuals with incomes more than $400,000 and for households with incomes more than $450,000.
Senate aides said the deal also would delay the looming spending “sequesters,” due to take effect Wednesday, by two months. The final sticking point Monday evening was over how to account for the cost of the delay.
Republicans wanted the cuts to be replaced with other cuts, while Democrats wanted to tap tax increases to replace the spending cuts.
• David Sherfinski contributed to this article.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
Stephen Dinan can be reached at firstname.lastname@example.org.
- Federal deficit shrinks 20 percent in fiscal 2014
- Obama administration issues permits for wind farms to kill more eagles
- Activists urge Obama to go rogue, sidestep Congress
- Bipartisan House votes against 'patent trolls' who file lawsuits against innovators
- Bipartisan House votes to stop patent 'trolls'
Latest Blog Entries
Sean Lengell covers Congress and national politics and can be reached at email@example.com.
- GOP tests Democrats on college loan issue
- Lawmakers outside intelligence loop get miffed about briefing structure in Congress
- John Boehner: Time is right to bring latest farm bill to House floor
- Supreme Court nears rulings on key voting rights cases
- John Boehner demands answers on NSA, phone records
Latest Blog Entries
By Brahma Chellaney
- Obama: Hole U.S. 'digging out of' requires billions more in unemployment benefits
- Bill OReilly reminds: Nelson Mandela was a communist
- Sen. Rand Paul pushes 'economic freedom zones' for Detroit
- Redskins' season hits bottom with Chiefs blowout
- Spike in battlefield deaths linked to restrictive rules of engagement
- FENNO: Mike Shanahan's empty words no salve to free-falling Redskins
- U.S. debt jumps a record $328 billion tops $17 trillion for first time
- Sen. Rand Paul: 'I am seriously thinking about' running for president in 2016
- Legalizing illegal immigrants is the solution to Obamacare: Democrat
- Obamas call to close Vatican embassy is 'slap in the face' to Roman Catholics
Independent voices from the The Washington Times Communities
Al Maurer provides a common sense, conservatarian, Constitutional conservative perspective from the battleground state of Colorado
Film Reviews and Articles by Kevin Williams
"Critical thinking is thinking about your thinking while you're thinking in order to make your thinking better." - Dr. Richard Paul
Go beyond tourism's "top 10" bus tour destinations with Susan McKee as she explores the varied history, culture, food, and gardens, of the world.
Let it snow
White House pets gone wild!