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.

2cents's picture

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.


Bang, bang, bang.

What's that?

It's the can being kicked down the road by our government leaders.


Interesting that the Republicans insist on raising the amount exempted from estate tax every year depending on inflation, but these same Republicans resist cost of living increases for seniors on Social Security who are living month to month and have to sometimes chose between food or medicine.


@ tk:

Deficit reduction using "chained CPI" for Soc. Security was Pres. Obama's idea.


@TK....Amen to that. And that is exactly what it is, a choice between the two.


Bread and Circuses, Congress with the Hail Mary Pass, and Biden doing the final push, so when it all leads to a new recession/depression, Obama can say he really didn't do it.



You must not have kids or grandkids. You have no problem with leaving those generations a debt they didn't make and can't be paid. Pretty selfish of you.


I have grandchildren. My children and grandchildren are doing better then we are because they have had more opportunities and have taken advantage of them. Many of the benefits they enjoy come from the things we older people fought for.


@Tk....right again. My children have far better lives than we ever had at much younger ages just because of the fights we fought for them. Right on, TK. Truer words were never spoken. And their salaries were higher because of those fights as well. They made far more money more quickly than we ever did at younger ages as well.

I am in my sixties, my son in his forties and my grandchildren in their teens. Who knows WHAT may happen by the time my grandchildren are my age? No one has a crystal ball that can predict that far ahead. It is guess work at best. Who knows. With the smarts these kids have now days, they may be able to beat the deficit within a short time without being so stubborn and by working together. Not like the rest of us who have to have it all our own ways. No one knows for sure.



So with your logic no one should pay their debt because we don't know what the future will bring? Lets keep racking up debt for your teenage grandchildren. They can figure it out.

You are a prime example of no personal responsibility and do what ever you want attitude.

I on the other hand feel our generation made this problem it's our responsibility to fix it.


Poor Republican Party. You're in complete disarray, having been hijacked by your own extreme right- wing faction. Infighting has led to things we never thought we would see: Mitch McConnell filibustering his OWN legislation, and Boehner unable to even get his own reps to agree on a fiscal cliff plan to present to Democrats for consideration. The current Republican-led House, without a doubt, is the most dysfunctional political entity since the Nixon White House. I liken the Tea Party folks to a single defective bulb in a string of Christmas tree lights: they singlehandedly keep the entire system from working as it should.


@ wiredmama222:

"Beat the deficit"? Not hardly.

Historically, countries tend to cheapen their currency and monetize the debt which leaves the citizens working harder for less due to inflation.

For decades, the politicians have been writing checks for benefits that can never be paid in order to get elected and stay in office. Someday, the checks will be returned NSF.

Ya got the "takers" and the "makers" and the "takers" are winning, but only temporarily. Because in the end, Mr. Market won't be fooled and always wins.

The Soviet Union didn't collapse because the Russians were stupid. The U.S. is following in its footsteps.


2cents's picture

(C) Just say it, "communism", all are equal until those that do all the work decide it is not worth it anymore.


Who is John Galt?


The fiscal cliff took years in the making going back to LBJ. Poverty in America was falling at a steep rate until LBJ started his war on poverty. What sense did that make if poverty was falling at a steep rate?
"What’s really striking, if we look at the chart, is that the poverty rate in America was steadily declining. But then, once President Lyndon Johnson started a “War on Poverty,” that progress came to a halt."


"Total federal and state welfare spending has increased more than 16-fold since 1964. Even since the 1996 welfare reform replaced Aid to Families with Dependent Children (AFDC) with the Temporary Assistance for Needy Families (TANF) program, spending has increased by 76 percent and by more than 20 percent since 2008."

There are many reasons for the increase in poverty rates. Loss of jobs in America is one of them. Many former middle income families now live in poverty due to loss of living wage jobs.

The Big Dog's back

centauri, your own chart showed poverty going down until the Reagan era. Hmmmmm.


centardi? Name calling, Big Dog? It goes to show you how the biased SR moderators allow trolls to name call but remove comments by other members that did not in any way violate the discussion guidelines.

1. Personal attacks (including: name calling, presumption of guilt or guilt by association, insensitivity or picking fights)

Carry on Big Dog, you get a free pass from the SR moderators to call people names. If you can't add something worthwhile to a discussion, then bring on the name calling.

The Big Dog's back

Answer the post.


@ Big Dog, I see that you edited your comment @ 7:16 for name calling. You didn't have to do that. You already got a free pass from the SR moderators. Carry on troll Big Dog.

BTW Big Dog, get some eye glasses and look at the charts again. Are you drunk or smoking that street weed to make you high?


No it did not pass the Republicans will not approve it. It was just on TV where they said no.


To all of you name callers, we that are receiving Social Security benefits are not takers. We are receiving the benefits because we worked and paid into the system.


Thank you for not saying you're getting back what you put into the system, because you're not. A majority of Social Security recipients get back quite a bit more than they put in! That's okay as long as there are lots of younger workers to support the program. The problem? There aren't, and Social Security in its present form is completely unsustainable.

You would have been much better off financially if the money from your paycheck, and your employer's matching percentages, had been stuck into an interest-bearing account, by the way...But that's all water under the bridge.

I don't begrudge those currently receiving such "earned entitlements," nor can we just cut them off for those who are too near retirement age to compensate. But we're going to have the phase the program out. It truly is a simple pyramid scheme, and it truly is well on the way to utter collapse. And how would THAT help any of the working poor or the elderly, hmmm?


You are living in a different age then some of us elderly. There were no 401s or employer matching funds.


Perhaps. On the other hand, many employers don't offer such benefits. Mine, for example, doesn't. I'm effectively limited to the same things YOU were limited to, perhaps less since I'm also not eligible for any kind of a pension.


@ tk:

There are "earned" entitlements and "unearned" entitlements.

SS is a pay-go Ponzi scheme. The money comes in, the money goes out. The youth are paying for your benefits and you paid for the seniors before you.

The SS trust fund is an accounting gimmick - there is no "trust fund."

SS began paying out more than it took in two yrs. ago - it can't last that way forever.


The trust fund would have a considerable amount more in it if they would quit using it for other things then what it is intended for.


@ tk:

Coulda, woulda, shoulda.

That "ship" sailed under LBJ's 1969 unified Federal budget plan.

Pres. Obama's 2% payroll tax deduction means there is less money currently going into the "fund."

As is said: A government with the policy to rob Peter to pay Paul can be assured of the support of Paul.

The Big Dog's back

Take the cap off. Problem solved.


I'm glad you are on here. You're an expert on everything no matter the subject.


@ tk:

Not too good on sports and entertainment. I've got a BA in Political Science and History, plus I'm an investor and self-educated in personal finance and economics (Austrian).


Contango, I have found that the most informed people are not sports fanatics. Sports are alright for entertainment at times but too many people are too engrossed in sports. There is a reason why a multi-page newspaper section is all about sports. Many Americans are well versed and informed about sports but know nothing about their government.

thinkagain's picture

Don’t forget his BS in Pretentiously Annoying…


@ thinkagain:

Annoying only to those who dislike documented facts.


We are all screwed!!!!!

The Big Dog's back

Just you goof.


Not me, with my assets being hidden in the Cayman Islands and no dependents, I plan on having a good time and the last check Written to the undertaker will bounce if I played my cards right


I dont understand why republicans should have any say on anything they want spending cuts to medicare and medicaid but dont want taxes on the rich to go up in other words make the poor and middle class pay once again isnt nothing new.If people would stop and think its the republicans that put the economy in this shape to begin with thats why I say they shouldnt have a say on any of it they just make things worse on everyone but the rich and then they wonder why they dont reelected DAH!I dont know about any one else but I know people are tired of their help the rich B.S and nothing will ever get any better as long as they are here to drag down people who try but arent rich so they dont care.

Dr. Information

Dems at their best. Want to raise taxes 600 billion but only cut 15 billion in spending. A nice ratio of 41/1 raising/cutting. We are all screwed. Don't pass this bill house, it's a bad deal for everyone.

Dr. Information

No new taxes. Remember Obie said that. Liar, and a cheat.


tk good luck to you. As one who had grandparents leave pre-Nazi Germany, I feel that gave me an education. Things like : try to plan for the future, don't spend more than you make, pay as you go, produce as much of your food as possible etc. Many here never knew trying times growing up. America's economy was vibrant after WW2. Now it is a &*^%#@8. The future is going to be a challenge.


@kURTje, I had quite an education growing up also. Believe me there were plenty of trying times. As a teenager I wasn't out partying. When I got married I had callouses across both hands from the work I did. Raising a family there were times we had to charge things but we always made sure we did not go into debt more then we could afford to pay back. We grew a garden then and although my husband will soon be 81 years old and has had open heart surgery, we still plant one and I can and freeze vegetables. We don't have to do that now but it is just who we are. Some things are just beyond our control. Our home has been paid off for years but the property taxes are now more per year than our house payments were. Propane prices skyrocketed although we keep our thermostat set in the 60's. You would be hardpressed to find someone more more frugal then we have been without being miserly. My husband and I just celebrated our 57th wedding anniversary and looking back we feel we have had a good life. Sometimes hard no doubt, but when we look at our children and grandchildren we know it was a success.

The Big Dog's back

Bravo TK!


@tk, while I think most older people can say their kids and grandkids have lived a better life than them, you also have to remember that it was a reflection of the booming economy along the way minus the out of control federal debt. Was the Bush administration to blame, sure. Yet, what has Obama done? Are we now a society that will just blame the guy behind him and not fix the problem? I think so. Its all added up to a run away train. To fix the issue, we can't just close our eyes and hope for the best. Drastic measures will need to take place to wrangle in our debt. I don't care if it takes 20 years to cut the debt down to a trillion or so dollars, just show us more improvement and less blaming everyone else. If Obama or any other future president claims they can fix the problem, but then doesn't, why do we re-elect them? We really need to demand more.

Unfortunately, our children and grandchildren are going to carry the burden of crushing debt, super high taxes and an economy that will just limp along.

Every day we are regulating more and more that is costing this nation jobs. We cannot compete with China or other countries anymore in several areas because of our regulations. Companies simply cannot make a product cheaper here. Jobs will continue to be outsourced, thats a fact.

What it all adds up to is a run away train. Everyone wants a fix, but nobody wants a fix. Don't touch my Medicare, don't touch my SSI, don't make Defense cuts, but dear Lord, fix the problem. We can't fix the problem without making some serious cuts and thats the bottom line. This is a national problem.


@ tk:

Good for you. Most today have little-to-no understanding of frugality but have a "you owe me" and "I want it NOW" attitude.

I'm sure that you and your spouse are an inspiration to many.

A wonderful and healthy New Yr. to you and yours!

BTW: I worked in factories (Amer. Crayon for one) and grocery stores in order to help put myself through college.


HSA cap (thanks to Obamacare) will really pinch the middle class even more.

Also, read below....reeks of hypocrisy , lies and more government BS by this administration. Wait....just it comes......Bush's fault right?

A tax increase for everyone but the favored wealthy few

In praising Congress's huge new tax increase, President Obama said Tuesday that "millionaires and billionaires" will finally "pay their fair share." That is, unless you are a Nascar track owner, a wind-energy company or the owners of StarKist Tuna, among many others who managed to get their taxes reduced in Congress's New Year celebration.

There's plenty to lament about the capital and income tax hikes, but the bill's seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment.


Meanwhile the Republican has more strife among themselves. The old GOP doesn't get along with the Log Cabin GOP. Then the Tea Party doesn't like the old GOP. What's an GOP person supposed to do? (okay won't lie here - kinda like watchin M go at each other..such small minds)