Fiscal cliff deal heads to House after Senate vote

Updated at 12:34 p.m. ET

WASHINGTON Squarely in the spotlight, House Republicans planned a closed-door meeting Tuesday to decide their next move after the Senate overwhelmingly approved compromise legislation negating a fiscal cliff of across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies.

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In a New Year's Day drama that climaxed in the middle of the night, the Senate endorsed the legislation by 89-8 early Tuesday. That vote came hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell of Kentucky sealed a deal.

A GOP leadership aide told CBS News' Jill Jackson on Capitol Hill that House Republicans would meet twice about the bill. The first meeting - to discuss potential options and seek feedback from members - was expected early afternoon Tuesday. No decision from Republicans was expected before a second meeting to be held later in the day.

It 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 measure 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.

• The art of the "fiscal cliff" deal
• Senate overwhelmingly passes fiscal cliff deal

House Speaker John Boehner pointedly refrained from endorsing the agreement, though he's promised a vote on it or a GOP alternative right away. But he was expected to encounter opposition from House conservatives, and it was unclear when the vote would occur.

Biden scheduled a separate meeting with House Democrats to reprise his role of Monday night when he promoted compromise to Democrats before that chamber voted.

CBS News correspondent Nancy Cordes reports that Democrats expect almost all of their members to vote in favor of the deal.

Boehner and House Majority Leader Eric Cantor, R-Va., arrived at the Capitol in late morning, and both bid "Happy New Year" to greeters but didn't say anything substantive about the Senate-passed bill.

One of the more conservative House Republicans, Rep. Tim Huelskamp, had no such reticence to speak.

"It's three strikes in my book and I'll be voting no on this bill," he told CNN Tuesday morning, saying the legislation would impose a hardship on small businesses around the country and falls short of addressing the need for cuts in spending.

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.

President 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," Mr. 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 Mr. 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. Mr. 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.

Despite bitter battling over taxes in the campaign, even die-hard conservatives endorsed the measure, arguing that the alternative was to raise taxes on virtually every earner.

"I reluctantly supported it because it sets in stone lower tax rates for roughly 99 percent of American taxpayers," said Sen. Orrin Hatch, R-Utah. "With millions of Americans watching Washington with anger, frustration and anxiety that their taxes will skyrocket, this is the best course of action we can take to protect as many people as possible from massive tax hikes."

[GirlFridayCA]

This deal does impact the taxes on the middle class. I will personally pay an additional $1000.00+ in federal income tax. None of the "middle class" tax credits that are mentioned in the article would apply to me. After going through work furloughs, pay reduction, losing my home to foreclosure, I still am working full time, even have acheived a promotion, only to see my money run out after 3 weeks each month, with one week left to payday. I don't have any write-offs, credits or tax relief programs that benefit me. My tax returns are so simple, just the standard deduction and the tax table - which seems to increase my tax by twice whatever gains I am able to make in salary increases. Last year's tax return took my breath away when I looked at the tax table. This year isn't looking any better.
In fact, the 2% increase in Social Security tax resulted in $93.42 less in my take home pay yesterday as opposed to November 30th paycheck. Ugh... no burden on the middle class??~!! and that is said with a straight face looking right into the TV cameras?! Really????

[legalbutunjust]

Dan30003 replies:

Legal,

I still want you on my side regardless of your criminal past. Lets start the new year off on good footing.

-------------------------

And as to the second part of this, what "side" would that be, Dan?

Do you have a job for me to do? Are you a "creator"? I do offer certain services myself, not sure any of them are what suits your fancy, though? lol

[legalbutunjust]

Well Dan, I know slow thinks you are a hypocrite.

Ahh ha, but alas, is slow, himself, one as well?

I mean, he rails against the PA, and claims it is in gross violation of the A1, A4, and A6.

Yet he openly acknowledges being, in some sense of the term and for lack of a better one, a 'government spy' with present duties and responsibilities to protect the public against potential threats to national security or others among the public.

Can he be doing what he's been doing and still be in favor of his position on the PA, and not be a hypocrite as well? Even a little bit of one?

[legalbutunjust]

Actually slow, in all honesty, I am not sure it's me you're thinking of when you say you've been specific on it. I can tell you very little specific information about anything concerning who you are or are not.

I don't think I have ever asked for specifics, and the one time I might have just last week, you told me pretty plainly that it was not something you could egress into.

I do see your point. It may very well be that nothing you really are doing is violating a person's right to free speech, privacy, to a shield from unreasonable inquisition, to confront witnesses and to have their own, speedy trial and their right to counsel.

But that wouldn't be because I know that. I don't know what I don't know, and your current lot or station in life I really am not too familiar with (on here).

[canadiantrue]

Who cares what i think? Hey, I make 120,000 doing CONSTRUCTION. I happily contribute to the betterment of my society. I don't whine about the poor, I am grateful for my country. You, sir, are as unpatriotic as they come. Your countries problems are rooted in the narcissism you selfishness you wear as a badge.

[canadiantrue]

To bbe serious, though, I don't understand how the GOP has any influence at all. Their agenda is to the rich, they are NRA yessirs who distort all that is Christian as they kick the poor while he is unaware of his own best interests ( why does he vote Republican)???

[realtimecoffee]

quantum_analysis replies: Hey RTC -- if we shorted SS so much in 2012, how come the SS Trustees tell us that the $2.7 Trillion 2011 SURPLUS grew by $100 Billion in 2012, and is now at $2.8 Trillion?
---
Look, everyone knows the SS will run out of money in 20-30 years and either benefits will have to be cut drastically or payroll taxes raised. The longer we wait to make those adjustments the larger the adjustments will have to be. On top of that in the next year or two payouts will start to exceed income and we will start having to cash in some of those IOU's, which means we will have even less income tax revenue to shore up the system. Not cutting the payroll tax would have given us a couple more years to work on a fix. Once you add in Medicare/Caid the GAO figures "mandatory" spending will exceed federal income around 2035. Forget the rest of the federal budget. The harder you try to keep a Ponzi alive, the more someone has to pay in, and in the end it will collapse anyway.

[realtimecoffee]

Happy New Year to you too Ranger, and to one and all.

[realtimecoffee]

A SUMMARY OF THE 2012 ANNUAL REPORTS
Social Security and Medicare Boards of Trustees

http://www.ssa.gov/oact/trsum/index.html

Social Security's expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Redemption of trust fund assets from the General Fund of the Treasury will provide the resources needed to offset the annual cash-flow deficits. Since these redemptions will be less than interest earnings through 2020, nominal trust fund balances will continue to grow. The trust fund ratio, which indicates the number of years of program cost that could be financed solely with current trust fund reserves, peaked in 2008, declined through 2011, and is expected to decline further in future years. After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033, three years earlier than projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2086.

[canadiantrue]

in Canada , we are okay with helping the poor (they don't spend their welfare check on uzi's )

[legalbutunjust]

In this country, the general attitude is to imprison or indenture the poor by systems of modern peonage. They must be made into convicts first, and then afterward, the games begin. They often can last most or all of a lifetime, for the peon.

[canadiantrue]

Some of those on welfare are victims of bad GOP policy. There may be a future president in that homeless shelter. ( he ain't gonna be a Republican thank God)

[legalbutunjust]

I would be willing to bet that

[legalbutunjust]

Not sure why only the first seven words of that post appeared here.

maybe Ranger is onto something, maybe there really is funny business going on behind the scenes.

That above statement is not what I had submitted, and that is a fact; it was only the beginning of a much longer sentence.

And, what happened to the period if it wasn't?

[legalbutunjust]

Dan30003 replies:

Legal,

I still want you on my side regardless of your criminal past. Lets start the new year off on good footing.

--------------

LOL! My "criminal past." LOL!

That criminal past, as you call it, is a joke. Seriously, I've never looked at it any different. Speeding 71 in what I thought was a sixty-five but was actually still within the 55 zone? One cop that says, basically, let him go, while his Nazi-mentality, combative partner says, "no, he's intox."

LOL. And then 9 and one half years later, in a situation that I didn't even cause. Not even pulled over, later telling a lying cop "no, I won't", and having a judge agree 5 weeks later with my uncooperativeness. License returned, improper arrest ruled, have a nice day.

And you call that a criminal past? Dan, you don't the 50th of it, let alone the proverbial "you don't know the half of it."

You've got to be kidding me.

Too bad you weren't around for my exchange with Alan the "Fed", the SS guru. I think I rather spelled it out for him quite clearly.

[legalbutunjust]

It's really kinda farcical how defense attorneys who hold hands with prosecutors can simply ignore with utter impunity exculpatory facts and witnesses, and aid and assist in "ambush" trials, illegally withholding and disclosing case evidence.

Funny how a cop can tell your witnesses an hour after your stop, "no, he isn't drunk now, but he sure was an hour ago where he was pulled over."

Funny also how certain judges prefer perjured testimony and falsified police forms and reports over the simple truth, especially when the photos I'm holding in my hand lay down the real deal, and demonstrate the inconvenient laws of physics that contradict those lies.

[legalbutunjust]

I am.

I had a '99 conviction on a misdemeanor out of another county, and over nine years later, based purely on that conviction, I was framed for the same crime again- right in my own backyard so to speak. The charge in the second case was a felony because the law in this state is that a second offense in ten or less years is felony in grade. That is what it must be charged as. Repeat offender crap.

The only thing was, that in the second case, I wasn't even pulled over, nor seen by police driving. Basically, what happened, is that I broke down a hundred or so yards from a parked car that was struck by some third vehicle that had evidently left the scene, and I was charged when the cops showed up, with DWI, and leaving the scene of a property damage accident.

the only thing is, there was never any proper damage on my vehicle to show that I hit any other anything, be it a car, boat, snowmobile, jet ski, go cart- any vehicle. The reports were fabricated and subsequently, my witnesses went ignored. One judge indeed dismissed the refusal I gave, and returned my license to me, ruling the arrest improper. That's when things started getting really corrupt, and I can't explain it all here. No purpose in doing so.

But, I hope you get the picture.

[legalbutunjust]

WHAT-IS-HE-SMOKING replies:

You do know that that was Rangers quote I used.

-------------

It never appeared referenced that way. Where had been the citation?

[1pheasant1]

I suppose it could happen in the next 200 years. I'm not going to hold my breath waiting for it.
Until then, Happy 2013.

[legalbutunjust]

you too, fez

[Keeping-it-real]

Quantum and APUFAN, I suppose you are not part of 'the 2%' and perhaps don't aspire to be. The audacity with which you lay claim on money that is not yours is disturbing and difficult to comprehend. If you are in 'the 2%', you are making your money too easily and part with it too readily.

Perhaps your audacity is fueled by the dehumanizing tactics of the liberal rhetoric. Why is that when liberals want to garnish the wages of hardworking Americans they refer to them in dehumanizing statistics (e.g. the Top 2%), but when it comes to advancing an entitlement agenda it suddenly becomes so personal: '15 million (i.e. 5%) are without health coverage so everyone needs to burden the cost of coverage' or '2 million Americans (i.e. half a percent) need an extension to long term unemployment benefits so we're raising on the top 2%' or 'Betsy this' and 'Juanita that'?

So, let's see what that abstract 2% statistic means:
- 116 million households in the US
- The top 2% would equate to about 2.1 million households or families
- The average size of a US family earning >$100k is just over 3 people
- The top 2% is roughly 6.3 million Americans

This means that 6.3 million Americans are being targeted to solve the tax shortfall of the other ~305 million Americans (don't be fooled into calling taxes 'revenue', governments collect and spend money not create it). In actuality, these 6.3 million Americans are being burdened to solve the problems created by the few thousand Americans in government (Democrats and Republicans alike) that can't spend within their means, enact flawed policy, and have over-leveraged our country in the process.

My family is part of that group of 6.3 million Americans that work to earn more than $250,000 a year. My wife and I both started in minimum wage jobs 25 years ago, took on debt to get through college, and had our share of hardship along the way. Yes, we are fortunate to have our health, the mental capacity, and instilled values to advance our own cause in life. We are also first generation American 'latino' so the privileged white American reason for our success can be discarded.

We 'trickle down' plenty to the local and national economy. We do this through consumption of goods and service as well as through charitable giving. We have to work 50-60 hour weeks to keep the jobs that keep our place in that 'Top 2%'. Because of the amount of hours we work we end up outsourcing many household chores and needs to individuals and small business owners, think: lawn mowing, housekeeping, handyman stuff, and child care. We give to charitable organizations because of our catholic values and overall gratitude for what we have. Despite liberal media coverage, We don't shower in Champagne, live in an MTV 'Crib' or take a helicopter to work.

That additional $18,000 of my earnings that will now go straight to the government will not go to the local economy. Since I hadn't planned to lose $18,000 this year the other things will need to curtail are:
- Local dining out ($5,000/yr),
- Summer vacation ($6,000/yr),
- Spring vacation ($2,000/yr)
- Clothing ($1200/yr),
- Manicures and hair salon ($900/yr),
- More frugal grocery shopping ($1,200/yr),
- Reduce charitable giving ($1,500/yr)
- Eliminate expensive local community farm shopping ($500/yr)
- Get just basic cable ($1,000/yr)
- Not complete about $60,000 in home remodel project planned over the next 3 years.

We'll hold onto our cars another few more years and I'll wash them myself. I don't list these things as any sort of hardship for my family, they are not. I list this so you understand the impact to all those people making an honest living from goods and services consumption of 'the 2%'.

Because the spending needs of an entitlement society are endless, you will come after the fruits of my effort again and again. At some point we will decide that it isn't worthwhile for my wife to work because her salary puts us in too high a tax bracket and it just goes to pay taxes anyway. Good news is she'll spend more time with the kids during the week and caring for herself, bad news is the babysitter will then too lose her job, the housekeeping lady will lose another customer as will the lawn service guy. We'll eat out even less and find other things to cut further reducing our consumption of the local economy.

Now multiply these consequences times 1 or 2 million households and let me know how this increase in taxes helps the working class?

[1pheasant1]

Why didn't you just type "Me, me, me!" Your vision for America has millions living out of a cardboard box, but that doesn't seem to be of concern.

[realtimecoffee]

Nice statement of viewpoint Keeping-it-real