After a lot of false bravado, the Republican members of Congress collectively tucked their tails between their legs and passed the White House and Senate approved deal to avert the so-called fiscal cliff 257 to 167 at 10:45 p.m. on Tuesday night (see roll call).
The agreement, which will see income tax rates rise to pre-Bush era levels on individuals earning more than 400,000 and couples earning more than $450,000, passed the Senate Dec. 31 with strong bi-partisan support, 89 to 8.
The bill will mark the first time in more than two decades that a broad tax increase has been approved with GOP support, reports the Washington Post. Washington must have been abuzz as the movers and shakers arm-twisted, called in favors, and blackmailed colleagues to get this deal passed. Just a few hours ago, many people had lost hope that the last-minute accord would pass the House.
House Speaker John Boehner and others had been entertaining the idea of tacking on spending cuts and sending the bill back to the Senate. Some more raucous House Republicans made the hopes of passage look dim, bashing their Senate counterparts for approving the measure by saying they must have been too drunk or feeble to do their job:
Retiring Rep. Steven C. LaTourette (R-Ohio) said:
My recommendation would be not to take a package put together by a bunch of sleep-deprived octogenarians on New Year’s Eve.
A Daily Caller reporter quoted LaTourette as saying:
Our sense…was that a number of the [Senate] Republicans who voted for it must have been drunk.
Rep. Darrell Issa (R-CA) said:
Frankly I can’t account for what happens after midnight and all of that partying and revelry and drinking that goes on New Years Eve at 2:00 in the morning. What I can tell you is they did half of a bill.
In the end, enough Republicans FINALLY came to their senses and did the sensible thing. Obama was pleased – even if he has to roughly double the income level at which taxes are going up – because he gets to claim victory in a tax fight that he lost exactly two years ago. Obama said after the House vote:
A central premise of my campaign for President was to change the tax code that was too skewed towards the wealthy at the expense of working, middle class Americans. Tonight, we’ve done that.
Here’s the video of Obama’s remarks:
The bill isn’t all unicorns and rainbows. In short:
- The bill will not extend the payroll tax holiday, meaning someone earning $50,000 will take home roughly $1,000 less.
- The deal also contains major giveaways to NASCAR, Hollywood and Wall Street. For investors, dividends above $400,000 will be taxed at 20 percent, rather than rising back to the pre-Bush rate of 39.6, writes the Huffington Post. (Those earnings will be subject to a new 3.8 percent health care reform tax).
- We have to watch this whole scene play out again in the coming weeks as the “sequester” spending cuts are delayed for just two months.
However, 2 million unemployed workers will get to keep their benefits and the price of milk won’t double.
Boehner himself voted for the bill in the end, as did Rep. Paul Ryan, former GOP V.P. nominee. Majority Leader Eric Cantor (Va.) voted against.
Obama took off for Hawaii just after his short statement, where Michelle and the girls have been waiting for him since Christmas.