Cliffhanger no more? House pushing to final vote

By David Espo

Associated Press

Published: Tuesday, Jan. 1 2013 12:00 a.m. MST

The U.S. Capitol is seen as Congress convenes to negotiate a legislative path to avoid the so-called "fiscal cliff" of automatic tax increases and deep spending cuts that could kick in Jan. 1., in Washington, Sunday, Dec. 30, 2012. (AP Photo/J. Scott Applewhite)

J. Scott Applewhite, ASSOCIATED PRESS

WASHINGTON — Weary lawmakers in the House pushed at last toward a final congressional vote on legislation to avoid a national "fiscal cliff" of middle class tax increases and spending cuts, a New Year's Night culmination of a struggle that tested divided government to the limit.

Passage would send the measure to President Barack Obama for his signature and seal a political triumph less than two months after he won re-election while calling for higher taxes on the wealthy. The late-night House vote took place less than 24 hours after Senate action spilled over from New Year's Eve into the pre-dawn hours of 2013.

In addition to neutralizing middle class tax increases and spending cuts taking effect with the new year, the legislation raises tax rates on incomes over $400,000 for individuals and $450,000 for couples. That was higher than the thresholds of $200,000 and $250,000 that Obama campaigned for. But remarkably, in a party that swore off tax increases two decades ago, dozens of Republicans supported the bill at both ends of the Capitol.

Supporters of the bill in both parties expressed regret that the bill was narrowly drawn, and fell far short of a sweeping plan that combined tax changes and spending cuts to reduce federal deficits. That proved to be a step too far in the two months since Obama called congressional leaders to the White House for a post-election stab at compromise.

Majority Republicans did their best to minimize the bill's tax increases, just as they abandoned their demand from earlier in the day to add spending cuts to the package.

"By making Republican tax cuts permanent, we are one step closer to comprehensive tax reform that will help strengthen our economy and create more and higher paychecks for American workers," said Rep. Dave Camp of Michigan, chairman of the tax-writing House Ways and Means Committee.

He urged a vote for passage to "get us one step closer to tax reform in 2013" as well as attempts to control spending.

House Democratic Leader Nancy Pelosi also said the legislation included "permanent tax relief for the middle class," and she summoned lawmakers to provide bipartisan support as the Senate did.

The bill would also prevent an expiration of extended unemployment benefits for an estimated two million jobless, block a 27 percent cut in fees for doctors who treat Medicare patients, stop a $900 pay increase for lawmakers from taking effect in March and head off a threatened spike in milk prices.

It would stop $24 billion in across-the-board spending cuts set to take effect over the next two months, although only about half of that total would be offset with savings elsewhere in the budget.

The economic as well as political stakes were considerable.

Economists have warned that without action by Congress, the tax increases and spending cuts that technically took effect with the turn of the new year at midnight could send the economy into recession.

Even with enactment of the legislation, taxes are on the rise for millions.

A 2 percentage point temporary cut in the Social Security payroll tax, originally enacted two years ago to stimulate the economy, expired with the end of 2012. Neither Obama nor Republicans made a significant effort to extend it.

House Republicans spent much of the day struggling to escape a political corner they found themselves in.

"I personally hate it," Rep. John Campbell of California, said of the measure, giving voice to the concern of many Republicans that it did little or nothing to cut spending.

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