After months of tense negotiations between the White House and congressional Republicans, Congress passed legislation to deal with at least one aspect of the fiscal cliff—the set of tax increases and spending cuts that begin to go into effect this month—late last night. The makes permanent the George W. Bush tax cuts for individuals making less than $400,00 a year and families making less than $450,000; those making more will see their rates go up to Clinton-era levels. It also postponed the spending cuts, known as sequestration, for two months, and extended unemployment insurance for the millions of Americans looking for a job.
But the deal did not come together without the drama that has become typical in Washington. After months of offers and counteroffers between the White House and Speaker of the House John Boehner, Boehner passed the onus to the Senate to come up with a deal; the speaker did not even bring his own "Plan B" proposal to a vote because it had so little support in his own conference. When Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell failed to reach an agreement, the White House brought in Vice President Joe Biden to assist in negotiations. Their deal passed the Senate early Tuesday morning, but House Republicans showed resistance to the bill. Some Republicans wanted to send a version amended with spending cuts back to the Senate, where it would have been dead on arrival. Ultimately Boehner brought that Senate bill as it stood to a vote Tuesday night, and it passed with bipartisan support. However, a majority of House Republicans, including House Majority Leader Eric Cantor and Majority Whip Kevin McCarthy, voted against the bill.
Though liberals and conservatives alike expressed distaste with some of the aspects of the deal, both sides are claiming victory after the showdown. Obama had passed the first tax rate increase in over a decade, though he was disappointed that lawmakers could not agree on a more comprehensive bill to deal with the federal deficit. Republicans, meanwhile, note that the president ultimately made far more concessions than he said he said he would fresh off of re-election, and that the deal extended most of the Bush tax cuts.
Who won the fiscal cliff showdown? Here is the Debate Club's take:
Ron Bonjean Former Chief of Staff for the Senate Republican Conference