Congress approved a plan to end Washington’s long drama over the “fiscal cliff” late Tuesday after House Republicans surrendered to President Obama’s demand to let taxes rise on the nation’s richest households.
The House voted 257 to 167 to send the measure to Obama for his signature; the vote came less than 24 hours after the Senate overwhelmingly approved the legislation.
House Speaker John A. Boehner (Ohio) and most other top GOP leaders took no public position on the measure and offered no public comment before the 10:45 p.m. vote. Boehner 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 will indeed shield millions of middle-class taxpayers from tax increases set to take effect this month. But it also will 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 GOP support.
The measure also will keep benefits flowing to 2 million unemployed workers on the verge of losing their federal checks. And it will 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 legislation 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, GOP 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 GOP tally fell far short of a majority of the GOP 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 (Wis.), the GOP’s vice-presidential candidate last year, who parted ways from Sen. Marco Rubio (R-Fla.), a potential 2016 presidential contender, who voted against the measure.
But other top GOP leaders voted no, including Majority Leader Eric Cantor (Va.) and Majority Whip Kevin McCarthy (Calif.).
Boehner was humiliated just two weeks ago when the Republican rank-and-file refused to support a GOP 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.
In a brief statement, Obama praised congressional leaders for advancing the legislation, which he said would produce $620 billion in new tax revenue. “But I think we all recognize this law is just one step in the broader effort to strengthen our economy and broaden opportunity for everybody,” he said, noting that the fight over the budget will continue when the new Congress faces the imposition of sequestration cuts in just two months.
But Obama warned again that he would not negotiate with Republicans over the $16.4 trillion debt limit, which must be raised in the coming weeks. “While I will negotiate over many things,” he said, “I will not have another debate with this Congress over whether they will pay the bills they’ve already racked up.”
With that, Obama took off for Hawaii, where he left his wife and daughters the day after Christmas. It was unclear when he planned to sign the fiscal cliff measure, which calls for the top tax rate to rise immediately from 35 percent to 39.6 percent on income over $450,000 for married couples and $400,000 for single people.
The measure will protect more than 100 million families earning less than $250,000 a year from significant income tax increases set to take effect this month — although their payroll taxes will rise with the expiration of a temporary tax cut adopted two years ago.
In addition to avoiding much of the fiscal cliff, the measure will extend federal dairy policies through September, averting a threatened doubling of milk prices. The measure also will cancel a scheduled pay raise for members of Congress.