And so it ends a day of high political drama (go HERE and HERE for recap) with an up and down House vote: a partial resolution of the country’s fiscal cliff dilemma with a compromise that many in both parties consider lousy — but it keeps the U.S. from tumbling off the fiscal cliff. It was an action President Barack Obama, in an appearance shortly after the vote, praised for it’s bipartisan character. Obama also warned that he doesn’t intend to debate Congress over paying bills already incurred in the upcoming debt ceiling debate. The full text of Obama’s comments is HERE.
But is a lot more that has been put off in an act of institutional procrastination that many now say is merely “kicking the can down the road.” But in the end this partial victory was for those who believe compromise is not necessarily caving but a painful way to aggregate interests in a democracy that needs to function with a modicum of consensus. NBC:
An agreement to stave off the harshest and most immediate consequences of the “fiscal cliff” won approval in the House late Tuesday, and paving the way for President Barack Obama’s quick signature.
Following a day of hectic wrangling on Capitol Hill — where the prospects for passing the bipartisan, Senate legislation regarding the fiscal cliff hung in the balance for much of New Year’s Day — the House voted to pass the belated compromise measure over the objections of many conservative Republicans.
The legislation takes steps toward resolving the combination of automatic tax hikes and spending cuts that took effect at midnight on Jan. 1. It preserves tax rates as they were at the end of 2012, except for those individuals earning more than $400,000 and households earning over $450,000. It also allows taxes on capital gains and dividends to go up, and extends benefits of the unemployed. Additionally, the Senate bill delays the onset of the “sequester” — the swift, automatic spending cuts — for two months.
While the last-minute action on Capitol Hill essentially mitigates much of the risk posed to the U.S. economic recovery by the fiscal cliff, it hardly brings resolution to the bitter and often intractable fight in Washington over taxes and spending. The first half of 2013 will feature battles in Congress over raising the debt limit, continuing basic government funding and the expiration of this two-month delay in the sequester.
The fiscal cliff itself was the product of discord in Congress resolving those very issues. And the difficulty in attaining even this smaller deal — versus the kind of “grand bargain” Obama had first sought in talks with Republicans — offered a cautionary tale for the 113th Congress, in which the House, Senate and White House remain controlled by the same parties as during the past two years.
And even for much of Tuesday, House approval of the fiscal legislation — which was negotiated by Senate Minority Leader Mitch McConnell, R-Ky. and Vice President Joe Biden — was far from certain. GOP leaders were forced to cajole conservatives who complained the fallback deal contained insufficient spending cuts. Only after it became clear that Republicans wouldn’t have the votes to amend the Senate proposal — which the upper chamber said it wouldn’t even consider — did House Speaker John Boehner, R-Ohio, bring the bill to the floor.
A divided Republican House passed the Senate’s “fiscal cliff” agreement Tuesday night, following a tense day of GOP protests that the plan does not do enough to rein in federal spending.
President Obama lauded the vote, saying it averts a series of tax hikes and spending cuts that could have plunged the nation back into recession.
“This law is just one step” in an effort to reduce the nation’s debt, Obama said, noting that he had wanted a larger agreement. “That failure comes with a cost.”
Obama, who pledged to reduce the national debt in part by raising taxes on the wealthy, said he would continue efforts to reduce the federal debt while investing in the nation’s economic development. He said, “I am very open to compromise.”
Appearing with the president: Vice President Joe Biden, a key negotiator in fiscal cliff talks.
House Democrats provide the winning margin for the plan that stopped the fiscal cliff which technically took effect Tuesday with the new year.
Opponents said the plan’s two-month delay of major spending cuts only sets up more budget battles in the weeks to come, as the nation bumps up against its $16.394 trillion debt ceiling.
Earlier in the evening, House Republicans could not muster enough support to add spending cuts to the bill that the Senate passed in the early morning hours of Tuesday. So GOP leaders put the Senate bill on the House floor as is.
House Democratic leader Nancy Pelosi, D-Cal. said that while the plan doesn’t do everything many people want, “it is a good way for us to have a happy start to a new year.”
House Speaker John Boehner, R-Ohio, and other Republican leaders — who at one time vowed to block any increase in taxes — did not speak during the debate.
The fiscal cliff legislation raises tax rates on incomes over $400,000 for individuals and $450,000 for couples, while retaining the George W. Bush-era tax cuts for Americans with lower incomes. It also features an extension of unemployment insurance..
House Republicans agreed to the up-or-down vote Tuesday evening, despite earlier talk of trying to amend the Senate bill with more spending cuts before taking a vote. The bill delays for two months tough decisions about automatic spending cuts that were set to kick in Wednesday.
The deal does little to address the nation’s long-term debt woes, however, and does not entirely solve the problem of the “fiscal cliff.”
Indeed, the last-minute compromise — far short from a so-called grand bargain on deficit reduction — sets up a new showdown on the same spending cuts in two months amplified by a brewing fight on how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the “fiscal cliff” in short order.
A majority of the Republicans in the House voted against the bill. About twice as many Democrats voted in favor of the deal compared to Republicans. 151 Republicans joined 16 Democrats to vote against the deal, while 172 Democrats carried the vote along with 85 Republicans.
The Senate passed the same bill by an 89-8 vote in the wee hours of New Year’s Day. If House Republicans had tweaked the legislation, there would have been no clear path for its return to the Senate before a new Congress is sworn in Thursday.
The vote split Republican leaders in the House. House Speaker John Boehner voted yes. And so did the GOP’s 2012 Vice Presidential candidate Paul Ryan. But Eric Cantor, the number two Republican, voted no. And it was his opposition that had made passage of the bill seem unlikely earlier in the day.
President Obama clearly won the fiscal cliff skirmish on Tuesday as he faced down the Republicans, forcing them despite years of fervent promises to raise tax rates on the wealthy. But he also made concessions over New Year’s weekend that could weaken his hand in future battles.
Beating back a conservative revolt in his party, Speaker John Boehner brought to the House floor the compromise bill passed in a predawn session in the Senate. The bill was expected to pass late Tuesday night, with Nancy Pelosi’s Democrats estimated to provide about 150 votes, enough to offset substantial Republican defections…
….At the same time, Obama has left some in his party disaffected as well. By raising the income threshold at which higher taxes kick in from $250,000 to $400,000, the president did more than back off his constantly repeated campaign vow. He gave away a huge amount of future revenue that will make it more difficult to fund the entitlement and social programs dear to Democratic hearts.
Obama also signaled that when push comes to shove, when the final deadline is at hand, he will retreat from his line-in-the-sand position, although the White House would call it reasonable compromise that spared most people a nasty tax hike.
Still, this was his moment of greatest political leverage. And once the messy and embarrassing slog over the tax issue is resolved, the playing field will be more favorable to Republicans in 2013. The administration has little left to trade now that the debate will focus on the $110 billion in automatic spending cuts that Tuesday’s voting delayed for two months.
Even more troublesome, from the White House point of view, is that Republicans can again play the debt ceiling card, as they did in the summer of 2011. The threat of a government default in late February will bring enormous pressure on the president to reach an accommodation on spending cuts, just as the fiscal cliff essentially forced the Republicans to sacrifice wealthier taxpayers to avoid blame for higher levies on 98 percent of Americans.
There has been some early saber-rattling on that front. After Vice President Biden met with Senate Democrats on Monday, Sen. Chuck Schumer told reporters that they “talked about something I feel strongly about … that we should tell the Republicans on debt ceiling we are not negotiating any political agenda in return for raising the debt ceiling. That if they start doing that, we’re saying, ‘We’re not discussing it … If you want to let the debt ceiling lapse, and we don’t pay our bills, that’s on your shoulders. We’re not negotiating cuts, revenues, or anything else for the debt ceiling. That should just be done automatically. Don’t come and tie the two together because we’re not going to talk to you about that.’”
That, at least, is the administration’s position. But it is hard to imagine the Democrats sticking to that stance if the government’s ability to borrow is on the line. The political approach of blaming the GOP for a default might be tempting, but Obama would share responsibility for a credit downgrade that could rattle the markets and likely push the country into recession.
Be sure to read The Huffington Post’s collection of some key Tweets from conservatives angered over the deal on this page.
Here’s part of Red State’s Eric Erickson’s featured post titled, “The McConnell Tax Hike”:
The McConnell Tax Hike will become law of the land. Mitch McConnell can and should take responsibility for it.
The McConnell Tax Hike raises taxes on people making over $400,000.00, but it also raises taxes on the middle class. “More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes.”
Not only does the McConnell Tax Hike stick it to the middle class, it raises taxes $41 for every $1 in spending cuts. Those spending cuts are ephemeral as there is $330 billion in new spending and a $4 trillion price tag over the next ten years.
Both Hollywood and NASCAR get carve outs. So too do wind energy companies.
The Republican Establishment in Washington, DC should be burned to the ground and salt spread on the remains. Republicans who saw Mitch McConnell and John Boehner destroy the last plank of the Republican Party are going to need to look elsewhere for a savior for their party. Boehner and McConnell have declared they will survive. Their party? They don’t really care.
Conservatives must look elsewhere. I do not advocate a third party. I advocate bring fresh blood into the GOP.
Go the link to read it in its entirety.
You think this week was mind-numbingly tedious and frustrating and ridiculous and horrible? Wait two months for the next fiscal
cliffcurb, which will now have the bonus awfulness of a debt ceiling fight. So in addition to this manufactured sequester crisis which Congress has just put off for 60 days, we’ll have the very real and much more serious added risk of government shutdown and financial collapse.
Several Republicans said afterward they feared that, if the bill failed and taxes went up, their party would take the blame.
“You do have to know when to hold ’em and when to fold ’em,” Rep. Steve LaTourette (R-Ohio), an ally of Speaker John A. Boehner, said as he emerged from the meeting. “We’ve been beaten [in] this fight.”
Even so, the decision by Boehner (R-Ohio) to bring the bill to a vote rankled many Republicans. The compromise, they complained, did virtually nothing to cut spending. And while it kept the low George W. Bush-era tax rates for most Americans, the tax hikes it did contain were anathema to lawmakers who had sworn to oppose any increase. Indeed, passage of the bill in the Senate marked the first time in two decades that any Republican in Congress had voted for an income tax increase.
Some Republicans balked at the economic stimulus provisions in the bill — primarily the low-income tax breaks, which were a priority for President Obama and House Democrats. They also objected that the bill would raise far more in tax revenues than it would trim in federal spending, which they worried set a bad precedent for future budget negotiations with the president.
In the first caucus meeting, Rep. Eric Cantor of Virginia, the No. 2 Republican in the chamber, told members he could not support the bill. Others pushed for a vote on an amendment to add spending cuts.
For a time, Republican lawmakers said they were fired up to fight the Senate bill — many recalling with nostalgia Boehner’s Plan B, which would have taxed incomes only above $1 million, roughly the top two-tenths of 1% of Americans. That bill never came to a vote, however, because the speaker was forced to yank it from the floor last month amid GOP resistance.
As discussions continued into the evening, however, Republicans increasingly began to accept that they had little choice. Senate leaders had made clear they would not consider any changes to the bill — and a head count of GOP members indicated that even if an amendment were added to cut spending, a majority of the caucus would still oppose it.
Lawmakers also warily eyed the clock ticking toward morning, when the financial markets would begin reacting if the picture in Washington remained unsettled. Economists have warned for months that the combination of across-the-board tax increases and spending cuts would raise unemployment and potentially bring on a new recession.
Economists had warned that if the full effects of the fiscal cliff were allowed to take hold, the resulting reduction in consumer spending could have sparked a new recession.
The compromise deal extends the tax cuts for Americans earning under $400,000 (£246,000) – up from the $250,000 level Democrats had originally sought.
In addition to the income tax rates and spending cuts, the package includes:
*Rises in inheritance taxes from 35% to 40% after the first $5m for an individual and $10m for a couple
*Rises in capital taxes – affecting some investment income – of up to 20%, but less than the 39.6% that would prevail without a deal
*One-year extension for unemployment benefits, affecting two million people
*Five-year extension for tax credits that help poorer and middle-class families
Donald J. Trump ?@realDonaldTrump
I am a Republican…but the Republicans may be the worst negotiators in history!
4m R Joseph ?@rjoseph7777
Some complain Pres Obama is a bad negotiator, if he’s so bad how does he keep getting nearly everything that he wants? http://www.politicususa.com/obama-big-win-house-republicans-buried-fiscal-cliff-cave.html …
http://yhoo.it/VsaCUj take a look at asia stock market republicans dont like this news that’s to bad
23m 21st CENTURY | Bill ?@Political_Bill
@rolandsmartin Republicans got mad, stomped their little feet, pouted, and have taken their gavel and gone home. No cares. @sapienist
@savannahkhan @larsolsson Obama Tells Republicans to Forget About Causing Another Debt Ceiling Debacle http://www.politicususa.com/obama-tells-republicans-forget-causing-debt-ceiling-debacle.html … @BarackObama
58m Ezra Klein ?@ezraklein
Bet a lot of Republicans would’ve preferred a deal that was $10 in spending cuts for every $1 in tax increases.
1h News 24h Usa ?@news24husa
Sources: Enough Republicans Willing to Band Together to Unseat Speaker Boehner: American Majority Action spokesm… http://adf.ly/GmvCV
John C. ?@JCinQC
Hey, you, The Tyrant, Barack Hussein Obama, Rex Anus Pontificatus, normal people often have to work on vacation or give up vac days. Try it!
35m Winter_Thur ?@winterthur
@TawniVixen President Obama is one of the best strategists I’ve ever seen
45m John C. ?@JCinQC
As long as Reps are willing to deal with Obama & Dems as if they bargain in good faith, America loses. Joe Wilson was right; Obama lies.
52m Ivan Roberson ?@Ivanroberson
Conservatives Freak Out, Call for Boehner to be Fired and Blame Obama http://www.politicususa.com/conservatives-freak-out-call-boehner-fired-blame-obama.html … via @politicususa
1h 21st CENTURY | Bill ?@Political_Bill
LMAO! Media is shocked! Shocked! I tell you at Pres Obama’s BFD
1h 21st CENTURY | Bill ?@Political_Bill
RT @h4x354x0r: @[me] if there’s one thing I’ve come to understand about Obama, is that he’s a brilliant strategist. || F-ing #StrategicNinja
1h 21st CENTURY | Bill ?@Political_Bill
MAJOR PROPS TO: “The Bidenator” delivers the Senate 89 – 9 and puts major pressure on the House. Godfather Obama’s consigliere.
1h Paula DeLeon ?@nananb55
RT @DavidLimbaugh: What I find eerie, in retrospect, is Obama’s smug confidence that he was going to win. That … http://m.tmi.me/EFd9d
2h Gary Beasley ?@theabundantgift
Obama may not be a citizens, but reasonably fits the definition of fraud, usurper, liar, illegal, conspirator, dictator ! @obamascrewingus