House Approves Senate Bill to Avert Fiscal Cliff

Enough Republicans join Democrats to produce legislation to avoid fiscal cliff.

The Capitol dome is seen on Capitol Hill in Washington, Tuesday, Dec. 11, 2012, as Congress works on avoiding the fiscal cliff.
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After a tumultuous New Years Day on Capitol Hill, the House of Representatives voted 257 to 167 Tuesday on a plan that will stop tax hikes on households making less than $450,000 a year, extends unemployment benefits, and raises capital gains taxes.

The House approved legislation born in the Senate, hammered out in a hurry by two Washington insiders from opposing parties—Vice President Joe Biden and Senate Minority Leader Mitch McConnell. The pair came up with the pint-sized solution that kicked automatic spending cuts down the road by two months, but handled what would have been immediate tax increases slated to hit the middle class. That combination of spending cuts and tax increases had become known as the fiscal cliff.

The more than 150-page bill troubled both Republicans and Democrats in the House. The bill was loaded with what some lawmakers called nonsensical loopholes for businesses, wind farmers, and dairy producers. Race track owners would get more than $70 million in tax credits and the rum industry got a break as well.

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The proposal was a compromise that failed to satisfy either party completely. Both Republican and Democratic leaders had to wrangle their members up to the last minute. Earlier in the day, it looked as if Republicans might scuttle the deal by threatening to amend the Senate bill.

"I regret that this is not a big, bold balanced plan," Maryland Rep. Steny Hoyer said before the vote. "This night we take a step, a positive step and the people watching us on television tonight and reading about their congress tomorrow will see we were able to act, not perfectly, but in a bipartisan fashion."

Republicans were disappointed the Senate bill passed without deep cuts to entitlement programs, even though House Speaker John Boehner attempted to pacify his caucus by giving them an 11th hour opportunity to amend the legislation with more than $300 billion in added spending cuts. The GOP couldn't agree on what spending cuts would look like, once again revealing deep schisms within the party.

"I [could] not support the bill the U.S. Senate sent over early this a.m. Meaningful budget cuts and spending must be addressed moving forward," said GOP Rep. Paul Gosar of Arizona.

During a caucus meeting Tuesday afternoon, House Majority Leader Eric Cantor added to the chorus of disgruntled Republicans when he announced he could not in good faith vote for a bill that raised taxes and failed to address spending cuts. Adding to Republican frustrations over the bill, the Congressional Budget Office estimated that the Senate bill would add nearly $4 trillion to the nation's deficit over the next 10 years.

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"We look up and we see this huge sword hanging over our heads called the deficit," says California Republican Rep. Dana Rohrabacher. "It is going to chop our country to hell and our children are going to be chopped up as long as we do nothing. This is not a deficit reduction bill and that was a little bit of concern to a lot of us."

Many in the Democratic caucus, meanwhile, shared major concerns about the legislation, which they felt protected too many wealthy earners from tax increases.

House Minority Leader Nancy Pelosi brought in Vice President Biden to quell their concerns over the Senate bill and in just a matter of hours managed to convince the majority of Democrats to get onboard.

"Vice President Biden came into the caucus meeting today like an evangelical converting skeptics and did a miraculous job uniting this caucus," says New York Democrat Rep. Steve Israel. "You saw tonight a significant number of Democrats supporting this package in the interest of compromise and pragmatism."

The drama unfolded just days before the 113th Congress is sworn into office and is just a preview of fights to come, lawmakers said, as politicians tackle pending spending cuts, a needed increased in the government's borrowing limit and a budget debate

But the vote also reflected the changed politics of Washington, coming in the wake of President Barack Obama's strong re-election victory. Many Republicans came to accept that some tax increases were inevitable and now are positioning themselves to fight for large cuts in government spending rather than to continue to protect tax breaks for the wealthy.