Divided House Passes Tax Deal in End to Latest Fiscal Standoff
WASHINGTON — Ending a climactic fiscal showdown in the final hours of the 112th Congress, the House late Tuesday passed and sent to President Obama legislation to avert big income tax increases on most Americans and prevent large cuts in spending for the Pentagon and other government programs.
The measure, brought to the House floor less than 24 hours after its passage in the Senate, was approved 257 to 167, with 85 Republicans joining 172 Democrats in voting to allow income taxes to rise for the first time in two decades, in this case for the highest-earning Americans. Voting no were 151 Republicans and 16 Democrats.
The bill was expected to be signed quickly by Mr. Obama, who won re-election on a promise to increase taxes on the wealthy.
Mr. Obama strode into the White House briefing room shortly after the vote, less to hail the end of the fiscal crisis than to lay out a marker for the next one. “The one thing that I think, hopefully, the new year will focus on,” he said, “is seeing if we can put a package like this together with a little bit less drama, a little less brinkmanship, and not scare the heck out of folks quite as much.”
In approving the measure after days of legislative intrigue, Congress concluded its final and most pitched fight over fiscal policy, the culmination of two years of battles over taxes, the federal debt, spending and what to do to slow the growth in popular social programs like Medicare.
The decision by Republican leaders to allow the vote came despite widespread scorn among House Republicans for the bill, passed overwhelmingly by the Senate in the early hours of New Year’s Day. They were unhappy that it did not include significant spending cuts in health and other social programs, which they say are essential to any long-term solution to the nation’s debt.
Democrats, while hardly placated by the compromise, celebrated Mr. Obama’s nominal victory in his final showdown with House Republicans in the 112th Congress, who began their term emboldened by scores of new, conservative members whose reach to the right ultimately tipped them over.
“The American people are the real winners tonight,” Representative Bill Pascrell Jr., Democrat of New Jersey, said on the House floor, “not anyone who navigates these halls.”
Not a single leader among House Republicans came to the floor to speak in favor of the bill, though Speaker John A. Boehner, who rarely takes part in roll calls, voted in favor. Representative Eric Cantor of Virginia, the majority leader, and Representative Kevin McCarthy of California, the No. 3 Republican, voted no. Representative Paul D. Ryan, the budget chairman who was the Republican vice-presidential candidate, supported the bill.
Despite the party divisions, many Republicans in their remarks characterized the measure, which allows taxes to go up on household income over $400,000 for individuals and $450,000 for couples but makes permanent tax cuts for income below that level, as a victory of sorts, even as so many of them declined to vote for it.
“After more than a decade of criticizing these tax cuts,” said Representative Dave Camp of Michigan, “Democrats are finally joining Republicans in making them permanent. Republicans and the American people are getting something really important, permanent tax relief.”
The dynamic with the House was a near replay of a fight at the end of 2011 over a payroll tax break extension. In that showdown, Senate Democrats and Republicans passed legislation, and while House Republicans fulminated, they were eventually forced to swallow it.
On Tuesday, as they got a detailed look at the Senate’s fiscal legislation, House Republicans ranging from Midwest pragmatists to Tea Party-blessed conservatives voiced serious reservations about the measure, emerging from a lunchtime New Year’s Day meeting with their leaders, eyes flashing and faces grim, insisting they would not accept a bill without substantial savings from cuts.
The unrest reached to the highest levels as Mr. Cantor told members in a closed-door meeting in the basement of the Capitol that he could not support the legislation in its current form.
Mr. Boehner, who faces a re-election vote on his post on Thursday when the 113th Congress convenes, had grave concerns as well, but he had pledged to allow the House to consider any legislation that cleared the Senate. And he was not eager to have such a major piece of legislation pass with mainly opposition votes, and the outcome could be seen as undermining his authority.
Adding to the pressure on the House, the fiscal agreement was reached by Senator Mitch McConnell of Kentucky, the Senate Republican leader, and had deep Republican support in the Senate, isolating the House Republicans in their opposition. Some of the Senate Republicans who backed the bill are staunch conservatives, like Senators Patrick J. Toomey of Pennsylvania and Tom Coburn of Oklahoma, with deep credibility among House Republicans.
The options before the House Republicans were fraught with risks. Senate Democrats said they would not brook any serious amendments to their bill — one that was hard fought and passed in the dark of night with many clenched teeth on either side of the aisle. Senate Democratic leaders planned no more votes before the new Congress convenes Thursday afternoon.
An up-or-down House vote on the Senate measure presented many Republicans with a nearly impossible choice: to prolong the standoff that most Americans wished to see cease, or to vote to allow taxes to go up on wealthy Americans without any of the changes to spending and benefit programs they had fought for vigorously for the better part of two years.
“I have read the bill and can’t find the spending cuts — even with an electron magnifying glass,” said Representative Trey Gowdy of South Carolina. “It’s part medicinal, part placebo, and part treating the symptoms but not the underlying pathology.”
But with their options shrinking just two days before the beginning of a new Congress, the House leadership made one of the biggest concessions of their rebellious two years and let the measure move forward to avoid being seen as the chief obstacle to legislation that Mr. Obama and a bipartisan Senate majority said was necessary to prevent the nation from slipping back into a recession.
The measure, while less reflective of Mr. Obama’s fiscal agenda than Senate Democrats had wished, still provided fewer concessions than the president initially offered in a, tentative agreement with Mr. Boehner last month, and it was a far cry from what was on the table in 2011 when negotiators tried to reach a so-called grand bargain. “I thank all of you who will vote for it,” said Representative Darrell Issa of California. “I cannot bring myself to vote for it.”
Still, many Republicans, in light of the broad party support for the bill in the Senate and the unwavering, rare discipline they faced from Democrats, concluded that they had little room to maneuver. They decided they would save their fire for the coming rounds — the effort to increase the nation’s debt ceiling again in another month or two and an expiring governmentwide spending bill.
“We can and will pursue comprehensive tax reform,” Representative Camp said.
Republicans hope to fight for more spending cuts in the debt-ceiling vote, but Mr. Obama warned against that tactic.
“While I will negotiate over many things,” he said, “I will not have another debate with this Congress over whether or not they should pay the bills they’ve already racked up through the laws they have passed. Let me repeat: we can’t not pay bills that we’ve already incurred.”
The last time the House voted on New Year’s Day, according to Congressional staff members on the Rules Committee, was in 1951, on a measure concerning money for the Korean War.