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Fiscal Cliff Bill to House, Amid Doubts on Spending Cuts

By ANDREW TAYLOR

Squarely in the spotlight, House Republicans leaders shopped a Senate-approved "fiscal cliff" compromise to rank-and-file colleagues on New Year's Day and heard concerns that the accord lacked sufficient spending cuts. Vice President Joe Biden tried rallying House Democrats behind the deal in a separate meeting.

The two closed-door gatherings of House lawmakers came just hours after the Senate used an overnight vote to easily approve the bipartisan compromise, which would negate across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies.

House Speaker John Boehner, R-Ohio, met with other GOP lawmakers to gauge support for the accord. An aide said Republican leaders would not decide their course until a second meeting later in the day, suggesting that it might take time for Boehner and others to chart a course and to hold a vote.

Boehner has pointedly refrained from endorsing the agreement, though he's promised a vote on it or on a GOP alternative right away.

Exiting the House GOP meeting, Rep. Spencer Bachus, R-Ala., said he was among lawmakers who wanted the deal to include more spending cuts.

"I'd be shocked if this does not go back to the Senate" with changes by the House, Bachus said.

In a New Year's drama that climaxed in the middle of the night, the Senate endorsed the legislation by 89-8 early Tuesday. That vote came shortly after Biden pushed Democratic senators to back the agreement that he and Senate Minority Leader Mitch McConnell, R-Ky., had brokered hours earlier.

The measure would prevent middle-class taxes from going up but would raise rates on higher incomes. It would also block spending cuts for two months, extend unemployment benefits for the long-term jobless, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.

The bill ensures that lawmakers will have to revisit difficult budget questions in just a few weeks, as relief from painful spending cuts expires and the government requires an increase in its borrowing cap.

As the House staged a rare New Year's Day session, it was clear that there were divisions among lawmakers from both parties.

Rep. James Moran, D-Va., called it "a bad deal for America." Rep. Jason Altmire, D-Pa., said approving it would "show the American people that this Congress isn't broken."

Rep. Darrell Issa, R-Calif., said that while he might vote for it, "I won't do it thinking we've accomplished anything here today, other than the smallest finger in a dike that in fact has hundreds of holes in it."

Leaving the meeting of House Democrats, Rep. Elijah Cummings, D-Md., expressed support for the agreement.

"I am one of the most progressive members and I'm going to vote for it," he said.

The measure is the first significant bipartisan tax increase since 1990, when former President George H.W. Bush violated his "read my lips" promise on taxes. It would raise an additional $620 billion over the coming decade when compared with revenues after tax cuts passed in 2001 and 2003, during the Bush administration. But because those policies expired at midnight Monday, the measure is officially scored as a whopping $3.9 trillion tax cut over the next decade.

Allowed to lapse was a 2 percentage point cut in the Social Security payroll tax first enacted in late 2010 to help prod consumer spending and goose the economy. It meant an extra $1,000 in the wallets of typical families earning $50,000 annually.

An extension of the cut - which temporarily reduced the tax to 4.2 percent - lacked strong support from both parties, including the White House.

President Barack Obama praised the agreement after the Senate's vote.

"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," Obama said in a statement. "This agreement will also grow the economy and shrink our deficits in a balanced way - by investing in our middle class, and by asking the wealthy to pay a little more."

The sweeping Senate vote exceeded expectations - tea party conservatives like Pat Toomey, R-Pa., and Ron Johnson, R-Wis., backed the measure - and would appear to grease enactment of the measure despite lingering questions in the House, where conservative forces sank a recent bid by Boehner to permit tax rates on incomes exceeding $1 million to go back to Clinton-era levels.

In the Senate, three Democrats and five Republicans voted against the legislation.

"Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members - and the American people - have been able to review the legislation," said a statement by Boehner and other top GOP leaders.

Lawmakers hope to resolve any uncertainty over the fiscal cliff before financial markets reopen Wednesday. It could take lots of Democratic votes to pass the measure and overcome opposition from tea party lawmakers.

Under the Senate deal, taxes would remain steady for the middle class but rise at incomes over $400,000 for individuals and $450,000 for couples - levels higher than President Barack Obama had campaigned for in his successful drive for a second term in office. Some liberal Democrats were disappointed that the White House did not stick to a harder line, while other Democrats sided with Republicans to force the White House to partially retreat on increases in taxes on multi-million-dollar estates.

The measure also allocates $24 billion in spending cuts and new revenues to defer, for two months, some $109 billion worth of automatic spending cuts that were set to slap the Pentagon and domestic programs starting this week. 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.

Even by the 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.

Republicans said McConnell and Biden had struck an agreement Sunday night but that Democrats pulled back Monday morning. Democrats like Tom Harkin of Iowa said the agreement was too generous to upper-bracket earners. Obama's longstanding position was to push the top tax rate on family income exceeding $250,000 from 35 percent to 39 percent.

"No deal is better than a bad deal. And this look like a very bad deal," said Harkin.

The measure would raise the top tax rate on large estates to 40 percent, with a $5 million exemption on estates inherited from individuals and a $10 million exemption on family estates. At the insistence of Republicans and some Democrats, the exemption levels would be indexed for inflation.

Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.

The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.

Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.


AP reporters Larry Margasak and Andrew Taylor contributed to this report.

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democrackso

When you're a dopey Obamite you sign into all your inane screen names and vote comment down that you know are the truth.

PRICELES$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

January 01 2013 at 11:53 PM Report abuse +1 rate up rate down Reply
democrackso

The simple minded Obamite is voting comments down. LOL I bet he voted for Obama 5 times just like his Acorn instructors taught him.

January 01 2013 at 11:51 PM Report abuse -1 rate up rate down Reply
democrackso

boehnerisababy
LMAO!!!!!.if Govenor Quinn handed out corporate welfare why did Mitt Romney's company ship jobs from Freeport, Ill to Communist China?
++++++++++++++++++++++++++++++++
Romney company??? You really are a SIMP!!!!! LMAOOOOOOOOOOOOOOOOOOOOOOOO

You seem to be interested in getting a job in China. Contact Obamas job czar Jeff Immelt. He get you a job in China he's created 1000's of jobs overseas

January 01 2013 at 11:50 PM Report abuse rate up rate down Reply
democrackso

boehnerisababy
IM a republicanmite IM brain washed by Rush Limppig.

++++++++++++++++++++++++++++++
Tell your famliy members that they shouldn't try and brain wash you. It's a waste of time anyway. There's nothing to wash. LMAOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

January 01 2013 at 10:55 PM Report abuse +1 rate up rate down Reply
democrackso

Do you hang you poster of Saddam Hussein next to your diploma you got from Acorn University.

January 01 2013 at 10:51 PM Report abuse rate up rate down Reply
boehnerisababy

Well good night everyone. Oh,.....it's just you democrackso. I need to get a life...........LMAO!!!!!!!

January 01 2013 at 10:50 PM Report abuse +2 rate up rate down Reply
1 reply to boehnerisababy's comment
democrackso

You do need to get a life and you also need to get a job and get off of welfare.

January 01 2013 at 10:52 PM Report abuse +1 rate up rate down Reply
democrackso

boehnerisababy
We republicans thought by blocking the vote or suppressing it would let us win. Look how wrong we republicans can be.
+++++++++++++++++++++++++++++++++++++
Democrats hate voter Id laws because then Mickey Mouse, illegals and the dead wouldn't have been able to vote for Obama like they did in 2008. I know your Acorn instructor taught you that.

January 01 2013 at 10:49 PM Report abuse rate up rate down Reply
democrackso

boehnerisababy
Did you forget Im a republican.
++++++++++++++++++++++++++++++++
That's like posting that Pelosi's a Republican.

January 01 2013 at 10:43 PM Report abuse rate up rate down Reply
democrackso

boehnerisababy
We republicans are good at doing that.
+++++++++++++++++++++++++++++++++
Good at calling out liberal racists.

January 01 2013 at 10:41 PM Report abuse rate up rate down Reply
1 reply to democrackso's comment
boehnerisababy

We republicans better learn to widen our base if we don't we will never be able to survive.

January 01 2013 at 10:43 PM Report abuse -3 rate up rate down Reply
3 replies to boehnerisababy's comment
democrackso

boehnerisababy
Rick Perry = cow pie dying in the sun.
+++++++++++++++++++++++++++++++++++++
Your obsession with Rick Perry is interesting. He must give you a thrill up your leg.

January 01 2013 at 10:40 PM Report abuse rate up rate down Reply
1 reply to democrackso's comment
boehnerisababy

Oops.......I sure do miss the GOP three ring circus debates.

January 01 2013 at 10:45 PM Report abuse -2 rate up rate down Reply
1 reply to boehnerisababy's comment
democrackso

No one misses the three ring circus of Obama Pelosi and Reid.

January 01 2013 at 10:47 PM Report abuse -1 rate up rate down