WASHINGTON -- America’s not going over the fiscal cliff, as the House of Representatives Tuesday approved the last-minute deal to pull the nation away from the brink of economic chaos.
The vote came quick and without much controversy, a calm and collegial finish to a turbulent day. The House approved the measure by a vote of 257-167 and sent it to President Barack Obama for his signature.
“Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing a middle class tax hike that could've sent the economy back into recession and obviously had a severe impact on families all across America,” Obama said at the White House.
Immediately after talking to reporters, Obama left the White House to fly back to Hawaii, resuming the vacation he suspended after Christmas to return to the capital for budget talks.
In the Congress, Republicans vowed to press on in the weeks ahead to cut spending in ways they could not in the fiscal cliff deal.
“Now the focus turns to spending,” House Speaker John Boehner, R-Ohio, said in a statement after the vote. “The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”
Reluctant House Republicans, concerned the plan had too few spending cuts and not enough meaningful debt reduction, had threatened to stymie the plan. Their fury was fueled further by a new report from the nonpartisan Congressional Budget Office that the package would add $3.97 trillion to deficits over the next decade.
But they also came to realize that scuttling the package could instantly put the nation’s slowly improving economy in jeopardy. Tax rates had already gone up Tuesday, and automatic spending cuts were scheduled to kick in Wednesday.
In private meetings Tuesday, Republicans expressed concern that once domestic financial markets re-open after the New Year’s Day holiday Wednesday, reaction to legislative gridlock could be severe. It’s a risk, said Rep. John Fleming, R-La., “we all recognize.”
As a result, the debate became a virtual celebration of bipartisan agreement. “After more than a decade of criticizing these tax cuts, Democrats are finally joining Republicans in making these tax cuts permanent,” said House Ways and Means Committee Chairman Dave Camp, R-Mich. House Democratic Leader Nancy Pelosi, D-Calif., lauded the bill as a "very, very strong first step as we go into the new year.”
The legislation, passed by the Senate 89 to 8 Tuesday morning, will postpone the automatic spending cuts for two months. Individuals making more than $400,000 - $450,000 for families - would pay a top income tax rate of 39.6 percent, up from the current 35 percent. Others would pay at 2012 rates.
The plan also ties the alternative minimum tax to inflation, a relief for an estimated 30 million taxpayers who could have been hit with higher bills. Other measures include an extension of jobless benefits for the long-term unemployed and avoiding a huge cut in Medicare payments to doctors for a year.
The vote in the House came after a day of furious closed-door lobbying—and arm-twisting. Vice President Joe Biden met for two hours with House Democrats. At the same time, Republicans met privately twice, for a total of nearly three hours. They heard opposition from Majority Leader Eric Cantor, R-Va., who has a strong following among conservatives. “There was a lot of discontent in that room,” said Rep. Steven LaTourette, R-Ohio.