Lori Montgomery and Rosalind S. Helderman
WASHINGTON—House Republicans were clearing a path for final passage late Tuesday of a measure that would let taxes rise for the richest Americans, shield the middle class, extend emergency unemployment benefits and end Washington’s long drama over the “fiscal cliff.”
In a closed-door meeting with Republican lawmakers, House Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., outlined options for handling the bill, including a proposal to satisfy conservatives by tacking on billions of dollars in new spending cuts.
But the leaders warned that the Senate was unlikely to approve any changes to the carefully calibrated compromise and that a vote to amend the measure probably would leave the United States facing historic tax increases for virtually every American — and force House Republicans to take the blame.
The other option: Let the measure pass the House unchanged and go to the White House for U.S. President Barack Obama’s signature. Late Tuesday, it appeared that even some of the chamber’s staunchest conservatives were ready to give up the fight.
“I think the best outcome is to have a clean bill, actually put it on the floor and see what the consensus of the House is,” said Rep. Raul Labrador, R-Idaho, a freshman who has opposed every major bipartisan compromise on the budget over the past two years and said he would vote against the measure.
Rep. Lou Barletta, R-Pa., another freshman, said he would support the legislation as the “safest bet” to prevent a major tax increase that many economists predict would throw the U.S. back into recession.
If approved by the House, the measure would let the top tax rate rise immediately to 39.6 per cent from 35 per cent on income over $ 450,000 for married couples and $ 400,000 for single people — the first broad tax increase in two decades and the first since 1990 to pass Congress with Republican support.
The measure would 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 payroll taxes will rise for most households in 2013 with the end of a temporary tax cut approved two years ago.
In addition to dealing with the fiscal crisis, the measure would extend federal farm policies through September, averting an estimated doubling of milk prices. The deal also nixed a scheduled pay raise for members of Congress.
After weeks of partisan bickering over whether taxes should rise for anyone, the compromise bill rolled through the Senate in a highly unusual vote early on Tuesday morning. The measure was approved 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, as the 11 senators who are retiring received hugs and kisses from their colleagues in both parties.
Three Democrats voted against the measure: Tom Harkin of Iowa, Thomas Carper of Delaware and Michael Bennet of Colorado. Bennet said the bill would do little to reduce record budget deficits.
According to the non-partisan Congressional Budget Office, the measure would increase the national debt by $ 4 trillion over the next decade than if all of the tax hikes and scheduled automatic spending cuts had been allowed to kick in.
Five Senate Republicans also rejected the measure, including tea party favourites Rand Paul of Kentucky, Mike Lee of Utah and Marco Rubio of Florida, a potential contender for the 2016 Republican presidential nomination. But 40 others voted for it, including such GOP leaders on tax-and-spending policy as Sen. Patrick Toomey of Pennsylvania and Ronald Johnson of Wisconsin, a tea party star who frequently consults with conservatives in the House.
Neither party was entirely happy with the bill. While conservatives complained about new taxes on the rich and a lack of spending cuts, liberals complained about its provisions regarding inherited estates.
Although the tax rate would rise from 35 per cent to 40 per cent, estates worth as much as $ 5 million — $ 10 million for married couples — would go untaxed. And an inflation adjustment would guarantee that the size of the exemption would grow to $ 15 million for couples by the end of the decade.
“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,” House Minority Leader Nancy Pelosi, D-Calif., said after Biden briefed House Democrats on the contents of the bill.