Senate approves fiscal cliff legislation 89-8

WASHINGTON (AP) — Hours past a self-imposed deadline for action, the Senate passed legislation early New Year's Day to neutralize a fiscal cliff combination of across-the-board tax increases and spending cuts that kicked in at midnight. The pre-dawn vote was a lopsided 89-8.
Associated Press
Jan 1, 2013

Senate passage set the stage for a final showdown in the House, where a vote was expected later Tuesday or perhaps Wednesday on the measure, which also raises tax rates on wealthy Americans.

Even by the recent dysfunctional standards of government-by-gridlock, the activity at both ends of historic Pennsylvania Avenue was remarkable as the administration and lawmakers spent the final hours of 2012 haggling over long-festering differences.

"It shouldn't have taken this long to come to an agreement, and this shouldn't be the model for how we do things around here," said Senate Republican leader Mitch McConnell, who negotiated the agreement with Vice President Joe Biden.

Shortly after the Senate vote, President Barack Obama said, "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay."

Under the deal, taxes would remain steady for the middle class and rise at incomes over $400,000 for individuals and $450,000 for couples — levels higher than Obama had campaigned for in his successful drive for a second term in office.

Spending cuts totaling $24 billion over two months aimed at the Pentagon and domestic programs would be deferred. That would allow the White House and lawmakers time to regroup before plunging very quickly into a new round of budget brinkmanship certain to revolve around Republican calls to rein in the cost of Medicare and other government benefit programs.

Officials also decided at the last minute to use the measure to prevent a $900 pay raise for lawmakers due to take effect this spring.

"One thing we can count on with respect to this Congress is that if there's even one second left before you have to do what you're supposed to do, they will use that last second," the president said in a mid-afternoon status update on the talks. Yet when the roll was called nearly 12 hours later, only six Republicans and two Democrats opposed the measure.

As darkness fell on the last day of the year, Obama, Biden and their aides were at work in the White House, and lights burned in the House and Senate. Democrats complained that Obama had given away too much in agreeing to limit tax increases to incomes over $450,000, far above the $250,000 level he campaigned on. Yet some Republicans recoiled at the prospect of raising taxes at all.

Democratic senators said they expected a post-midnight vote on the measure. They spoke after a closed-door session with Vice President Joseph Biden, who brokered the deal with Senate Republican leader Mitch McConnell.

"The argument is that this is the best that can be done on a bipartisan basis," said Sen. Dianne Feinstein, D-Calif., when asked about the case the vice president had delivered behind closed doors.

Passage would send the measure to the House, where Speaker John Boehner, R-Ohio, refrained from endorsing a package as yet unseen by his famously rebellious rank-and-file. He said the House would not vote on any Senate-passed measure "until House members — and the American people — have been able to review" it.

Numerous GOP officials said McConnell and his aides had kept the speaker's office informed about the progress of the talks.

The House Democratic leader, Rep. Nancy Pelosi of California, issued a statement saying that when legislation clears the Senate, "I will present it to the House Democratic caucus."

Without legislation, economists in and out of government warned of a possible recession if the economy were allowed to fall over a fiscal cliff of tax increases and spending cuts.

And while the nominal deadline for action passed at midnight, Obama's signature on legislation by the time a new Congress takes office at noon on Jan. 3, 2013 — the likely timetable — would eliminate or minimize any inconvenience for taxpayers.

A late dispute over the estate tax produced allegations of bad faith from all sides.

After hours of haggling, Biden headed for the Capitol to brief the Democratic rank and file.

Earlier, McConnell had agreed with Obama that an overall deal was near. In remarks on the Senate floor, he suggested Congress move quickly to pass tax legislation and "continue to work on finding smarter ways to cut spending" next year.

The White House and Democrats initially declined the offer, preferring to prevent the cuts from kicking in at the Pentagon and domestic agencies alike. A two-month compromise resulted.

Officials in both parties said the agreement would prevent tax increases at incomes below $400,000 for individuals and $450,000 for couples.

At higher levels, the rate would rise to a maximum of 39.6 percent from the current 35 percent. Capital gains and dividends in excess of those amounts would be taxed at 20 percent, up from 15 percent.

The deal also would also raise taxes on the portion of estates exceeding $5 million to 40 percent. At the insistence of Republicans, the $5 million threshold would rise each year with inflation.

Much or all of the revenue to be raised through higher taxes on the wealthy would help hold down the amount paid to the Internal Revenue Service by the middle class.

In addition to preventing higher rates for most, the agreement would retain existing breaks for families with children, for low-earning taxpayers and for those with a child in college. Also, the two sides agreed to prevent the alternative minimum tax from expanding to affect an estimated 28 million households for the first time in 2013, with an average increase of more than $3,000. The law originally was designed to make sure millionaires did not escape taxes, but inflation has gradually exposed more and more households with lower earnings to its impact.

The legislation leaves untouched a scheduled 2 percentage point increase in the payroll tax, ending a temporary reduction enacted two years ago to help revive the economy.

Officials said the White House had succeeded in gaining a one-year extension of long-term unemployment benefits about to expire on an estimated two million jobless.

The legislation would delay for one year a 27 percent cut in fees for doctors who treat Medicare patients.

Also included is a provision to prevent a threatened spike in milk prices after the first of the year.

Even as time was running out, partisan agendas were evident.

Obama used his appearance not only to chastise Congress, but also to lay down a marker for the next round of negotiations early in 2013, when Republicans intend to seek spending cuts in exchange for letting the Treasury to borrow above the current debt limit of $16.4 trillion.

"Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone — and you hear that sometimes coming from them ... then they've got another think coming. ... That's not how it's going to work at least as long as I'm president," he said.

"And I'm going to be president for the next four years, I think," he added.

Obama's remarks irritated some Republicans.

Sen. John McCain of Arizona they would "clearly antagonize members of the House."

Associated Press writers Julie Pace, Andrew Taylor, Alan Fram and Ben Feller contributed to this report.



Tax increases and no spending cuts.

IMO, DOA in the House.

The President is locked in campaign mode and can't get out.

The Big Dog's back

Yeah, a President keeping his promises. Who'd a thunk?

Dr. Information

Kick that can.


Should be no pay raises for Congress. Actually, they shouldn't even get paid at all since they are not doing their jobs!


The "Bernank" is about the only one helping to keep this govt. and economy on life support!

"The Fed, in a circular arrangement, prints money out of thin air to buy U.S. Treasurys and mortgage-backed bonds, collects interest payments on the debt and then remits most of it back to the government."

"Between 2005 and 2007, the Fed on average remitted about $27 billion a year. As the Fed's holdings have swelled to over $2.9 trillion, remittances have risen to about $80 billion a year."

"Besides buying bonds, the Fed also is buying time for the government to avoid tough decisions."

Yea, let's tax, borrow and spend this country into the fiscal toilet of History!


$41 in tax increases for every $1 in cuts. THAT'S the administration's version of "balanced!" And everyone involved is doing SUCH an awesome job that they're all getting raises...

Contango, I only hope you're right. This isn't any kind of a "deal" unless it's a really BAD deal! I fear, though, you could be wrong. Early scuttlebutt is that enough Dems will join enough Republicans to pass the stupid thing.

This is Harry Reid's and Barack Obama's fault. The House passed a bill months ago. It's the same bill the Senate worked late last night to amend and pass. They couldn't have done that in, say, September? Now, of course, they're demanding the House pass it RIGHT NOW! (As an aside, Harry Reid couldn't be accused of stonewalling something this important if Barack Obama hadn't been spending like a drunken sailor from Day One of his first administration — and with patently obvious plans to continue his profligate spending through his second.)

I'd point out that among the 8 "no" votes in the Senate were those of Rand Paul and Marco Rubio. Like I said, obviously a bad deal whether we know everything that's in it yet or not.

The Big Dog's back

It should have been 100 to 1 considering all the goodies given to the rich the last 30 years. Buck up rich boys.


Dog writes:

"It should have been 100 to 1"

The vote could never be "100-to-1"


typical liberal math


Maybe Big Dog thinks that there are more than 50 states.

The Big Dog's back

For someone who criticizes other people for not reading, I was talking about revenue to cuts. And your lap dog followed you.


Typical liberal: It takes two posts to say what you mean. :)

The Big Dog's back

Typical Con, more than a 2 word sentence and things start getting foggy.


Typical liberal: Doesn't know how to write a complete clear sentence and needs others to guess at what she meant.


Come on Winnie, slow yesterday?


He wasn't talking about the vote!


If it's the rich that need to buck up and sacrifice a little, how come I'm one of the ones being so hurt by the myriad tax increases, inflation, and so on? I wouldn't meet Obama's ORIGINAL definition of rich let alone the new ones, and yet I'm getting hit. Even if your envy causes you to think it's okay to penalize success, why is it okay with you to hurt ME?

The Big Dog's back

sam, are you or are you not paying the lowest Federal tax in your life?


Thanks to Obamacare, even withOUT the insurance mandate, I'm now about to pay the HIGHEST I've ever paid. And WITH the insurance mandate? I'm one of those lucky folks who's going to have to choose between fines and premiums. As the fines go up, I'll then be stuck choosing between paying those fines and things like, I dunno, the gas bill, maybe?

The Big Dog's back

sam, if you are doing that well where this would affect you, you surely have enough to pay for insurance for your loyal employees.


Sorry, I should've been a little clearer in my response. It was implied, but only if you read between the lines. So, for the record: I do NOT own a business, small or otherwise. I work for somebody else.

ALSO for the record, I don't make anywhere near even YOUR definition of "rich!" And THAT'S why the Obamacare taxes and Obamacare penalties and Obamacare mandates are going to have very, very, VERY serious repercussions for me. In talking with plenty of other people, both in person and within various online communities, I'm not the only one!

Know what one of the current memes on Twitter is? "For Barack Obama so loved the poor that he's creating millions more of them." EXACTLY.

The Big Dog's back

sam, maybe you should talk to someone other than a right winger and read something other than a right wing website. My insurance went down $10 a week.


You'd be surprised at what I read - both in quantity AND in variety! That being said, read the Senate's version of a "fix" for the "fiscal cliff?" Your taxes are going up too, buddy. The Bush tax cuts are staying in place; they're being countermanded and then some by increased payroll taxes.

As for health insurance, what's your monthly premium? And who's the provider? I'll check into it. I'm not hopeful, but I'll check into it. At this point, I'll consider just about ANYthing!


@ Dog:

Just ignore the local and state income, property and sales taxes and service fees which have been rising for decades.

The Big Dog's back

Let's see, why did all of those taxes go up? Hmmmmm .... Oh yeah. Less money coming from the Federal Gov for all the things we grew up with. Why? Because it makes us so sad if the rich have to pay their fair share. Put 2 and 2 together and you'll see when all the local taxes started going up. It started with Reagan and his generous tax cuts to the rich. For shame, for shame.


I thought fair was 50/50 not 0/39 %


@ Dog:

So you acknowledge that local and state taxes have gone up and now you want Federal taxes to go up too?

IL and CA have raised taxes and they're still bankrupt - guess it wasn't the Feds.

Face it: The Feds can't tax the "rich" enough; it'll trickle down to everyone else.

2012 - $16T Fed deficit
2016 - $20T Fed deficit

Obamanomics: Tax, borrow, print and spend until bankruptcy ends.


So define middle class, or rich, want to live like greece if so I bet you can have obama get you an "Obama move incentive" ei "obama phon" these clown in washington and sandusky better wake the heck up. anyways already waisted to many words!!


Read the AP's puff pieces about inflation.


Who in this day & age makes $250,000 a year anyway unless you're a pro athlete or are in Hollywood? Hard to fathom even making a quarter of that. Especially in SinDudSki.