| Mini Fiscal Deal Avoids Cliff For Now |
| Jan-02-2013 |
| Keywords: obama, boehner, fiscal cliff, republican, democrat, spending cuts, debt |
With overwhelming Democratic support in the House, lawmakers Tuesday night passed the Senate crafted "fiscal cliff" proposal in a 257-167 vote.
Once signed into law by President Obama, those earning more than $450,000 a year will be taxed at a higher rate of 39.6%.
The bill provides a permanent fix to the alternative minimum tax, and also raises the tax rate on capital gains and dividends for top earners from 15% to 20%.
The bill delays automatic sequestration spending cuts for two months. However, it wasn't a total win for those making under $450,000 a year. The passed bill ends the so-called payroll tax holiday, which means that everyone will see their payroll taxes go up by two percentage points.
Final passage of the bill came at the end of a day filled with a lot of drama. Majority Leader Eric Cantor voiced opposition to the Senate proposal earlier in the day. Other Republicans echoed his concern over the bill, which has $1 in spending cuts for every $41 in new taxes, as well.
"I would be shocked if this bill didn't go back to the Senate," he said. "I think we're there on more revenue, but, you know, there is more revenue but no spending cuts," said Rep. Spencer Bachus, (R-AL).
Republicans floated a proposal to add $330 billion in spending cuts to the Senate bill, but back off the idea once leaders learned they did not have a majority behind any spending-cut plan, and allowed the straight vote.
In the straight up vote on the Senate bill, Republicans appeared boxed in, and cast their vote with a seeming defeated tone.
The final vote tally showed twice as many Democrats supporting the bill as Republicans - with 172 Democrats in favor, compared with 85 Republicans.
President Obama took to his podium shortly after the vote before midnight to thank those Democrats and Republicans who voted in favor of the bill. He also thanked Vice President Joe Biden for his efforts that helped push the bill through Congress.
"Thanks to the votes of Republicans and Democrats in Congress, I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing tax hikes that could have sent the economy back into recession," Obama said.
House Speaker John Boehner said shortly after the vote that Congress must now turn its attention to spending.
"The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the `balanced' approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt," he said.
However President Obama took a defiant tone towards those Republicans who believe he's now obligated to cut spending without generating additional revenues.
"The fact is, the deficit is still too high," Obama said, repeating his openness to examining ways to strengthen entitlement programs like Medicare. "But the deficit needs to be reduced in a way that's balanced," he added, saying "further reforms to our tax code" must accompany spending cuts.
"Today's agreement enshrines, I think, a principle into law that will remain in place as long as I am President," Obama said. "The deficit needs to be reduced in a way that's balanced. Everyone pays their fair share. Everyone does their part. That's how our economy works best. That's how we grow."
The president and lawmakers are likely to put the country through a similar series of debates and finger pointing in the near future. While the fiscal cliff deal addresses tax rates on higher earners, expect to be bombarded by debate focusing on the government spending and the debt ceiling, as well as automatic sequestration cuts which the fiscal deal simply delayed for two months. |
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Posted by Lou Dobbs Staff at 11:00 PM Email to a friend |
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