House Overwhelmingly Passes Tax Cut Bill
Updated at 7:34 a.m. Eastern.
Acting with uncommon speed, Congress sent President Obama sweeping, bipartisan legislation late Thursday to avoid a Jan. 1 spike in income taxes for millions and renew jobless benefits for victims of the worst recession in 80 years.
The measure also will cut Social Security taxes for nearly every wage-earner and pump billions of dollars into the still-sluggish economy. CBS News Capitol Hill correspondent Nancy Cordes reports, it's essentially an early Christmas present for every American tax payer.
The 277-148 vote came less than 24 hours after the Senate cleared the bill, 81-19.
The legislation was the result of a reach across party lines between Obama and top Republicans in Congress - stubborn adversaries during two years of political combat that ended when the GOP emerged the undisputed winner in midterm elections on Nov. 2.
CBS Radio News correspondent Bob Fuss reports that House Democrats tried but fell short of the votes to change the bill and trim back the generous benefits to those inheriting multi-million dollar estates.
Tax Cut Bill: A Guide to the Extensions, Cuts and Credits
What Deficit? Tax Deal Comes With Major Costs
Obama Tax Cuts: Winners and Losers
Rep. Ginny Brown-Waite, R-Fla., called it "a bipartisan moment of clarity" as the House moved toward a vote.
After forcing a delay in the House early in the day, Democratic critics settled for a separate vote in their bid to toughen an estate tax provision they attacked as a giveaway to the very rich. They were defeated, 233-194, with one vote of "present."
Rep. Anthony Weiner, D-N.Y., a vocal opponent of the bill who voted against it on Thursday evening, told CBS' "The Early Show" on Friday morning that Mr. Obama's compromise with Republican lawmakers was, "just not a good deal."
Weiner said his primary concern was adding to the already-stupendous federal budget deficit.
"We're already drowning in red ink," Weiner told "Early Show" co-anchor Harry Smith, adding that maneuvers already taken to try and mitigate the nation's financial woes would be overshadowed by the continued tax cuts.
"In one vote yesterday, we gobbled up all of the savings," said the New York Democrat. "We simply can't afford it."
House Republicans who will move into powerful posts when the GOP takes control in January had urged passage of the bill.
Rep. Eric Cantor of Virginia, in line to become majority leader, said the measure, while not perfect, marked a "first step" toward economic recovery.
Largely marginalized in the negotiations leading to the bill, Democrats emphasized their unhappiness with Obama.
"We stand today with only one choice: Pay the ransom now or pay more ransom later," said Rep. Brad Sherman of California. "This is not a place Democrats want to be. But, ultimately, it is better to pay the ransom today than to watch the president pay even more, and I think he'd be willing to pay a bit more next month."
Rep. Elijah Cummings, D-Md., said the White House "could have gotten a better deal" in secretive talks.
Weiner told "The Early Show" Friday morning that the Democrats' forced hand showed Republican lawmakers to be, "better poker players than the president."
Policy differences aside, the legislation stood on the brink of enactment an astonishingly quick 10 days after the president announced at the White House he had agreed on a framework with Republicans.
With the economy performing poorly and a year-end tax increase looming, there were none of the customary congressional hearings that normally precede debate on major legislation, and few if any complaints that lawmakers had not had enough time to review the legislation.
The bill provides a two-year extension of tax cuts enacted when George W. Bush was president, avoiding an increase at all income levels that would otherwise occur on New Year's Day.
It would also renew an expiring program of benefits for the long-term unemployed, and enact a reduction in Social Security taxes for 2011 that would amount to $1,000 for an individual earning $50,000 a year. The bill's cost, $858 billion over two years, would be tacked on to the federal deficit, a sore spot with deficit hawks in both parties.
Obama urged the House to approved the measure unchanged, calling the bill a good compromise with Republicans that would help the economy recover from the worst recession in decades.
But his pleas have failed to satisfy critics in the House who adamantly opposed a provision that would allow $5 million of each spouse's estate to pass to heirs without taxation, with the balance subjected to a 35 percent rate.
Many Democrats favor an alternative to reduce the amount that can be inherited tax free to $3.5 million, and tax the balance at 45 percent.
Supporters said that, if approved, the change would expose an additional 6,600 estates to taxes in 2011, and the government would collect $23 billion over two years as a result.
Democratic leaders have spent the past few days trying to satisfy liberals inside the party who wanted to kill - or at least change - the bill, without running the risk of having taxes rise for millions on Jan. 1.
Republicans have left them little maneuvering room, warning they may walk away from their agreement with Obama if the measure is changed.
Nor was the tax bill the only priority that the White House and congressional leaders worked on as the year - and their control of both houses of Congress - neared an end.
Temporary funding for the federal government expires over the weekend, and Democrats want to enact a pork barrel-stuffed spending measure before conservatives take over the House in January.
Obama still hopes to push ratification of a new arms control treaty with Russia through the Senate, and the White House and party leaders seek legislation to let openly gay servicemen and servicewomen remain in the military.
Rep. Peter DeFazio, D-Ore., one of the critics of the Obama-GOP agreement, said it is important for opponents to have the opportunity to vote on alternatives, even if they have no chance of passing.
"This is the last opportunity we have," he said, noting that Congress will soon adjourn for the year and Republicans will control the House in January.
Other tax cuts, enacted in the past decade, include a more generous child tax credit, breaks for college students, lower taxes on capital gains and dividends and a series of business tax breaks designed to encourage investment. All would be extended if the legislation passes.
The jobless benefits that would be renewed would go to individuals who have been laid off more than 26 weeks but less than 99. Checks average about $300 a week.
Numerous business tax breaks that are due to expire would also be extended, as would a series of provisions relating to energy taxes.
Among them is the federal subsidy for ethanol, supported by many veteran lawmakers from Midwestern states but targeted for cuts or possible extinction by conservatives who will take office in January.
© 2010 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. Acting with uncommon speed, Congress sent President Obama sweeping, bipartisan legislation late Thursday to avoid a Jan. 1 spike in income taxes for millions and renew jobless benefits for victims of the worst recession in 80 years.
The measure also will cut Social Security taxes for nearly every wage-earner and pump billions of dollars into the still-sluggish economy. CBS News Capitol Hill correspondent Nancy Cordes reports, it's essentially an early Christmas present for every American tax payer.
The 277-148 vote came less than 24 hours after the Senate cleared the bill, 81-19.
The legislation was the result of a reach across party lines between Obama and top Republicans in Congress - stubborn adversaries during two years of political combat that ended when the GOP emerged the undisputed winner in midterm elections on Nov. 2.
CBS Radio News correspondent Bob Fuss reports that House Democrats tried but fell short of the votes to change the bill and trim back the generous benefits to those inheriting multi-million dollar estates.
Tax Cut Bill: A Guide to the Extensions, Cuts and Credits
What Deficit? Tax Deal Comes With Major Costs
Obama Tax Cuts: Winners and Losers
Rep. Ginny Brown-Waite, R-Fla., called it "a bipartisan moment of clarity" as the House moved toward a vote.
After forcing a delay in the House early in the day, Democratic critics settled for a separate vote in their bid to toughen an estate tax provision they attacked as a giveaway to the very rich. They were defeated, 233-194, with one vote of "present."
Rep. Anthony Weiner, D-N.Y., a vocal opponent of the bill who voted against it on Thursday evening, told CBS' "The Early Show" on Friday morning that Mr. Obama's compromise with Republican lawmakers was, "just not a good deal."
Weiner said his primary concern was adding to the already-stupendous federal budget deficit.
"We're already drowning in red ink," Weiner told "Early Show" co-anchor Harry Smith, adding that maneuvers already taken to try and mitigate the nation's financial woes would be overshadowed by the continued tax cuts.
"In one vote yesterday, we gobbled up all of the savings," said the New York Democrat. "We simply can't afford it."
House Republicans who will move into powerful posts when the GOP takes control in January had urged passage of the bill.
Rep. Eric Cantor of Virginia, in line to become majority leader, said the measure, while not perfect, marked a "first step" toward economic recovery.
Largely marginalized in the negotiations leading to the bill, Democrats emphasized their unhappiness with Obama.
"We stand today with only one choice: Pay the ransom now or pay more ransom later," said Rep. Brad Sherman of California. "This is not a place Democrats want to be. But, ultimately, it is better to pay the ransom today than to watch the president pay even more, and I think he'd be willing to pay a bit more next month."
Rep. Elijah Cummings, D-Md., said the White House "could have gotten a better deal" in secretive talks.
Weiner told "The Early Show" Friday morning that the Democrats' forced hand showed Republican lawmakers to be, "better poker players than the president."
Policy differences aside, the legislation stood on the brink of enactment an astonishingly quick 10 days after the president announced at the White House he had agreed on a framework with Republicans.
With the economy performing poorly and a year-end tax increase looming, there were none of the customary congressional hearings that normally precede debate on major legislation, and few if any complaints that lawmakers had not had enough time to review the legislation.
The bill provides a two-year extension of tax cuts enacted when George W. Bush was president, avoiding an increase at all income levels that would otherwise occur on New Year's Day.
It would also renew an expiring program of benefits for the long-term unemployed, and enact a reduction in Social Security taxes for 2011 that would amount to $1,000 for an individual earning $50,000 a year. The bill's cost, $858 billion over two years, would be tacked on to the federal deficit, a sore spot with deficit hawks in both parties.
Obama urged the House to approved the measure unchanged, calling the bill a good compromise with Republicans that would help the economy recover from the worst recession in decades.
But his pleas have failed to satisfy critics in the House who adamantly opposed a provision that would allow $5 million of each spouse's estate to pass to heirs without taxation, with the balance subjected to a 35 percent rate.
Many Democrats favor an alternative to reduce the amount that can be inherited tax free to $3.5 million, and tax the balance at 45 percent.
Supporters said that, if approved, the change would expose an additional 6,600 estates to taxes in 2011, and the government would collect $23 billion over two years as a result.
Democratic leaders have spent the past few days trying to satisfy liberals inside the party who wanted to kill - or at least change - the bill, without running the risk of having taxes rise for millions on Jan. 1.
Republicans have left them little maneuvering room, warning they may walk away from their agreement with Obama if the measure is changed.
Nor was the tax bill the only priority that the White House and congressional leaders worked on as the year - and their control of both houses of Congress - neared an end.
Temporary funding for the federal government expires over the weekend, and Democrats want to enact a pork barrel-stuffed spending measure before conservatives take over the House in January.
Obama still hopes to push ratification of a new arms control treaty with Russia through the Senate, and the White House and party leaders seek legislation to let openly gay servicemen and servicewomen remain in the military.
Rep. Peter DeFazio, D-Ore., one of the critics of the Obama-GOP agreement, said it is important for opponents to have the opportunity to vote on alternatives, even if they have no chance of passing.
"This is the last opportunity we have," he said, noting that Congress will soon adjourn for the year and Republicans will control the House in January.
Other tax cuts, enacted in the past decade, include a more generous child tax credit, breaks for college students, lower taxes on capital gains and dividends and a series of business tax breaks designed to encourage investment. All would be extended if the legislation passes.
The jobless benefits that would be renewed would go to individuals who have been laid off more than 26 weeks but less than 99. Checks average about $300 a week.
Numerous business tax breaks that are due to expire would also be extended, as would a series of provisions relating to energy taxes.
Among them is the federal subsidy for ethanol, supported by many veteran lawmakers from Midwestern states but targeted for cuts or possible extinction by conservatives who will take office in January.
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Which is exactly what happened to the linen and lawn industries in 18th C Europe when the slave plantations exported cheap cotton.
This fundamentally changed the ordinary Britons from land righted commoners to industrial wage slaves. The universality of the salaried job and the employee was spawned. In one stroke removing a man's autonomy to make his own living no matter how menial by land or trade which had been hitherto inshrined in saxon serf laws and protected in the Magna Carta.
If one looks at the countries in Europe who do not have massive deficits and are holding capital they are all practising blatant protectionism . America of course, needing to go cap in hand to some of the most undesirable governments on the planet for credit, has not this luxury.
I believe precisely for the reasons above it is too late to protect the economic system that worked so well for the 20thC America must find a new way or face extinction.
How 'gullible' and 'stupid' is it to get on government welfare forever? ---The Democrats use government handouts to buy votes, and enslave people to them forever because they become dependent on government to survive. ---That's what Democrats do.
==============================
Hawk without malice you are an economic moron. The truth - is that Republicans have become delusional that the economy will outgrow the deficit if plied with enough tax cuts.
By fiscal year 2009, the tax-cutters had reduced federal revenues to 15 percent of gross domestic product, lower than they had been since the 1940s. We did that while engaging in two unfinanced wars. George W. Bush, signed into law $420 billion in non-defense appropriations, a 65 percent gain from the $260 billion he had inherited eight years earlier from Bill Clinton.
With that act of utter fiscal irresponsibility Republicans became exactly the same thing you accuse Democrats of- you embraced a free-lunch fiscal policy.
David Stockman, Ronald Regan's Budget Director said, "Republicans were oblivious to the danger of flooding financial markets with freely printed money and, at the same time, removing restrictions on leverage and speculation. As a result, the combined assets of banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.
But the trillion-dollar conglomerates that inhabit this new financial world created by are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn't been able to obtain virtually free money from the Fed's discount window to cover their bad bets.
Having lived beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs in goods production and in service categories like trade, transportation, information technology and the professions has shrunk by 12 percent, to 68 million from 77 million. The only reason we have not experienced a severe reduction in nonfarm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.
Why were we surprised that during the last bubble (from 2002 to 2006) the top 1 percent of Americans - paid mainly from the Wall Street casino - received two-thirds of the gain in national income, while the bottom 90 percent - mainly dependent on Main Street's shrinking economy - got only 12 percent. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy.
The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing - as suggested by last week's news that the national economy grew at an anemic annual rate of 2.4 percent in the second quarter. Under these circumstances, it's a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach - balanced budgets, sound money and financial discipline - is needed more than ever. "
So Hawk just who it is that is receiving welfare the poor or Wall Street?
Mark Twain
"There are lies, damned lies and statistics"
Charles Wentworth ****
Unitl we tarrif every American company that is manufacturing goods overseas and make it more expensive to produce in China than in the U.S. the jobs we create will only be low paying service jobs.
Hell we do not even have the courage to close up the tax loop holes.
We will never get a handle on the deficit and it is going to destroy us.
Straight up truth - you cannot be a world power if you are the worlds greatest debtor.
It's a magic word. Like "freedom" and "the revolution." Like "heaven."
It means whatever you need it to mean, when your ideas don't work.
A "dumber than dumb" general public once again lends its consent to yet another Republican swindle. If a deficit-plagued gov't takes less taxes from the wealthy, they must take more taxes (money) from everyone else, if it is going to balance the books and reduce the deficit. It's stealth "spending" that robs from the poor to enrich the wealthy. And for the record, the wealthy DO USE A DISPROPORTIONATELY LARGE amount of government services. They are the repeat players who lobby Congress 24\7 and who litigate ad nauseam in the court system, as their preferred means for amassing their wealth. It's something the "dumber than dumb" reply contingent below is incapable of grasping.
Republicans just love dummies. They're so gullible and pliable (and profitable). A real godsend for Republican shysters, who now have linked forces with Dem shysters for a humongous pay-day for the wealthiest on Earth --- Just before essential services and programs for everyone else are about to be slashed into oblivion. Take a good hard look. It explains why the U.S. is hopelessly in debt and is no longer the strongest economic power in the World. This is what happens when a "dumber than dumb" electorate joins forces with Dem and Republican shysters who work them over like Maddoff worked over his chump investors.
By continuing what has been going on already!?!
Anyone that thinks taxes, whether tax cuts or tax increases, should take a second place to the spending/deficit of the Federal Government is looking at the situation backward.
The Fed Gov should do the same. America is taxed enough. Percentages range from -10% (taxes not paid in given as EIC) to +35% (or more, but I'm not going check) for top wage earners.
The Fed Gov "salary" is billions and billions of dollars each year.
Let them learn to live within their budget.
The only people who would disagree with this very logical explanation are those that want to live off the Fed Gov.
Go find a job. Stop living off me.
=========================================================================
Any of you 13 million people suddenly unemployed around the end of 2008 reading oldgals statement above??
It's called a verbal boot heel in the mouth as you are trying to climb on to the life boat
"The only people who would disagree with this very logical explanation are those that WANT to live off the Fed Gov."
I certainly hope that most of the unemployed do not want to live off the Fed Gov, but are finding it necessary at this time to do so. Also, unemployment is not exactly living off the government, since one pays in unemployment insurance for years in some instances before drawing.
Thanks for your kind words, chonder, but they don't apply to me.
Repubs don't ever learn.They have started early this time.