January 2, 2013

Congress approves new taxes on richest in 'fiscal cliff' deal

The drawn-out 'fiscal cliff' drama ends as the House of Representatives postpones automatic spending cuts and signs off on higher tax rates for the wealthy.


WASHINGTON – Congress approved a plan to end Washington's long drama over the fiscal cliff late Tuesday after enough House Republicans surrendered to President Obama's demand to let taxes rise on the nation's richest households.

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Speaker of the House John Boehner, R-Ohio, center right, and House Majority Leader Eric Cantor, R-Va., center left, head for a Republican conference meeting to discuss the "fiscal cliff" bill Monday in Washington.


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President Barack Obama and Vice President Joe Biden make a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House Tuesday.

The Associated Press

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The House voted 257 to 167 to send the measure to the White House; the vote came less than 24 hours after the Senate overwhelmingly approved the legislation.

House Speaker John Boehner of Ohio and most other top Republican leaders took no public position on the measure and offered no public comment before the vote at 10:45. He declined even to deliver his usual closing argument, leaving House Ways and Means Committee Chairman Dave Camp, R-Mich., to defend the measure as the "largest tax cut in American history."

The bill would indeed shield millions of middle-class taxpayers from tax increases set to take effect this month. But it also would let rates rise on wages and investment profits for households pulling in more than $450,000 a year, marking the first time in more than two decades that a broad tax increase has been approved with Republican support.

The measure also would keep benefits flowing to 2 million unemployed workers on the verge of losing their federal checks. And it would delay for two months automatic cuts to the Pentagon and other agencies that had been set to take effect Wednesday.

Many economists had warned that the scheduled tax increases and spending cuts would have plunged the economy back into recession.

Conservatives complained bitterly that the bill would raise taxes without making any significant cuts in government spending. For much of the day, the measure appeared headed for defeat as Boehner contemplated tacking on billions in spending cuts, a move that would have derailed a compromise that the White House and Senate leaders had carefully crafted.

In the end, Republican lawmakers decided not to take a gamble that could force the nation to face historic tax increases for virtually every American -- and leave House Republicans to take the blame.

"I don't know if playing chicken with the American people at this point is in the best interest of the people," said freshman Rep. Lou Barletta, R-Pa.

The bill drew 85 votes from Republicans and 172 from Democrats, meaning well more than half of its support came from the Democratic minority.

With 151 Republicans voting "no," the Republican tally fell far short of a majority of the party's caucus. That broke a long-standing preference by Boehner to advance only bills that could draw the support of a majority of his Republican members.

In a sign of the moment's gravity, Boehner himself cast a rare vote: He supported the bill. So did Rep. Paul Ryan of Wisconsin, the Republican vice presidential candidate this year, who parted ways from Sen. Marco Rubio, R-Fla., a potential 2016 presidential contender, who voted against the measure.

But other top Republican leaders voted no, including Majority Leader Eric Cantor of Virginia and Whip Kevin McCarthy of California.

Boehner was humiliated just two weeks ago when the Republican rank-and-file refused to support a Republican alternative that would have permitted taxes to rise only on income over $1 million a year. But when he scheduled a vote on the Senate bill, even some of the chamber's staunchest conservatives agreed that giving up the fight was probably the best course.

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