After weeks of partisan bickering over whether taxes should increase for anyone, the compromise bill rolled through the Senate early Tuesday in a highly unusual New Year’s Day vote. The vote was 89 to 8, with both parties offering overwhelming support.
The moment served as a rare bipartisan coda to what has been one of the most rancorous, partisan Congresses in recent history. The 11 senators who are retiring received hugs and kisses from their colleagues. The current Congress ends at noon Thursday, when the new Congress will be seated, and lawmakers would have been forced to scrap the fiscal-cliff legislation and start over.
Three Democrats voted against the measure, including liberal Tom Harkin (Iowa), and moderates Thomas R. Carper (Del.) and Michael F. Bennet (Colo.).
Bennet complained that the bill would do little to reduce record budget deficits. According to the nonpartisan Congressional Budget Office, the measure would cause the national debt to be $4 trillion higher by 2022 than if all of the cliff’s tax increases and spending cuts had been allowed to take effect.
Five Senate Republicans also rejected the measure, including tea party favorites Rand Paul (Ky.) and Mike Lee (Utah).
But 40 others voted for it, including such GOP leaders on tax-and-spending policy as Sen. Patrick J. Toomey (Pa.) and Ronald H. Johnson (Wis.), a tea party star who frequently consults with House conservatives.
Neither party was entirely happy with the bill. While conservatives complained about new taxes and a lack of spending reductions, liberals complained about its provisions regarding inherited estates.
Although the tax rate will rise from 35 percent to 40 percent, estates worth as much as $5 million — $10 million for married couples — will go untaxed. And an inflation adjustment will guarantee that the size of the exemption will grow to $15 million for couples by the end of the decade.
Still, House Democrats largely embraced the measure, which was negotiated by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) and endorsed by Obama. After receiving a point-by-point 90-minute briefing from Biden on Tuesday, Democrats rallied around the package.
“It’s long overdue for us to have this solution to go forward and remove all doubt as to what comes next for our country,” said House Minority Leader Nancy Pelosi (D-Calif.).
But it was a different story among House Republicans, who at first appeared to strongly oppose it. In the early afternoon, the GOP gathered for the first of two lengthy closed-door briefings in the basement of the Capitol.
There, Boehner told members that he wanted to hear their views but would not take a position. Cantor, meanwhile, “forcefully” aired concerns that the measure would raise taxes but not cut spending, said Rep. Jeff Flake (R-Ariz.). Afterward, Cantor emerged and told reporters: “I do not support the bill.”
That view was widespread in the room, where House members vented their frustrations at the Senate for foisting the arrangement upon them. Many rose to say they should take advantage of the legislative process, tack on billions in new spending reductions and force the Senate to respond.
“We should not take a package put together by a bunch of sleep-deprived octogenarians on New Year’s Eve,” retiring Rep. Steven C. LaTourette (R-Ohio) said in a dig at Senate leaders. LaTourette, who has championed ambitious deficit-reduction efforts, faced the prospect of casting his last vote in Congress for a measure that would sharply deepen deficits.
Rep. Spencer Bachus (R-Ala.) said a consensus was developing that the GOP should amend the Senate’s plan. “I would be shocked if the bill did not go back to the Senate,” he said.
The negative reaction threatened to plunge Washington back into the high-stakes, last-minute drama that has characterized both the fiscal-cliff negotiations and a series of other recent confrontations between the two parties over spending and taxes, including the fight over raising the federal borrowing limit in the summer of 2011.
Senate Democrats and administration officials warned that the Senate would reject any move to amend the measure. The House would be responsible for a dive over the cliff hours before U.S. financial markets were set to open Wednesday after the New Year’s holiday.
For hours, there was no decision on how to proceed. As leaders huddled, rank-and-file members returned to their offices and were greeted with confusing messages from conservatives and constituents.
Former House speaker Newt Gingrich (R-Ga.), who has opposed any deal to raise taxes, voiced support for Cantor. But conservative writer William Kristol, wrote a blog post titled “Say Yes to the Mess.”
“Politically, Republicans are escaping with a better outcome than they might have expected, and President Obama has gotten relatively little at his moment of greatest strength,” Kristol said, advising House Republicans to take the deal.
Shortly before dinner, Republicans gathered behind closed doors again to settle on a new plan: Leaders would survey members about the spending-cut package to determine if it could pass. If not, they would allow the Senate bill to move ahead.
Around 8 p.m., they announced a decision. The Senate bill would receive a vote, with the expectation that Democrats and Republicans would join forces to approve the measure.
During floor debate, Camp, chairman of the tax-writing Ways and Means Committee, said GOP members should support the bill because it would make “permanent tax policies Republicans originally crafted” under President George W. Bush.
Rep. Sander M. Levin (Mich.), the ranking Democrat on the Ways and Means Committee, countered that Democrats should back the bill because it would let the Bush tax cuts expire for the wealthy, breaking the “iron barrier” to tax increases since 1993.
Paul Kane and Ed O’Keefe contributed to this report.