By Alexander Bolton
The bill was approved in an 89-8 vote that came after only 10 minutes of formal floor debate and no official score from the Congressional Budget Office. The Joint Committe on Taxation estimated it would reduce federal revenue by $3.93T over the next decade compared to current law.
Five Republicans and three Democrats voted against the bill: Sens. Michael Bennet (D-Colo.), Tom Carper (D-Dela.), Chuck Grassley (R-Iowa), Tom Harkin (D-Iowa), Mike Lee (R-Utah), Rand Paul (R-Ky.), Marco Rubio (R-Fla.) and Richard Shelby (R-Ala.).
Sens. Jim DeMint (R-S.C.), Mark Kirk (R-Ill.) and Frank Lautenberg (D-N.J.) missed the vote.
A ninety-minute meeting of Senate Democrats ending shortly before midnight sealed the deal negotiated between Vice President Biden and Senate Republican Leader Mitch McConnell (R-Ky.).
It would permanently extend the Bush-era income tax rates on individual income up to $400,000 and family income up to $450,000. It permanently sets the estate tax rate at 40 percent, up from 35 percent, and exempts inheritances below $5 million.
It postpones the automatic spending cuts known as the sequester for two months and offsets the $24 billion cost of the delay with a mix of spending cuts and new revenues. It extends unemployment benefits for one year without offsetting their impact on the deficit, preventing 2 million people from losing government assistance.
It also would prevent a hike in congressional pay that authorized by an executive order from President Obama raising federal worker pay.
Biden made a late-night visit to Capitol Hill to convince Democrats to back the agreement but did not need to do much arm-twisting.
“I am feeling very, very good. I think we’ll get a very good vote tonight,’ Biden said, leaving the meeting with Democrats.
Senate approval sends the bill to the House, where Speaker John Boehner (R-Ohio) said the House will review the Senate bill.
The House Rules Committee has already waived the requirement of a three-day review period, setting the stage for a New Year’s Day vote.
“The House will honor its commitment to consider the Senate agreement if it is passed,” Boehner said. “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.”
Yet the bill would appear to be a hard sell with House Republicans, many of whom objected to an earlier bill sought by Boehner that extended tax rates on annual income under $1 million as a tax hike.
The Senate bill also includes few spending cuts, which House Republicans have repeatedly demanded.
“I don’t see any balance yet, that’s the fundamental problem,” Rep. Jason Chaffetz (R-Utah) told The Hill. “If you don’t cut spending, there’s no way you’re going to pick up Republican votes.”
Heritage Action for American, a conservative advocacy group, urged lawmakers to oppose the deal.
“To be clear, this is a tax increase. In 2013, the top marginal rate, death tax, and taxes on long-term capital gains and dividends will all be higher than in 2012. Comparing tax rates to hypothetical rates that have hardly any support is nothing more than misleading Washington spin,” the group declared in a statement.
Liberal groups and labor unions have begun to line up against the deal, as well. They complained the White House and Democrats were giving up too much, particularly after Obama campaigned on a pledge to raise tax rates on households with annual income above $250,000.
Read Full Article Here
