House OK’s fiscal deal as GOP resistance wanes

Obama hails fiscal cliff resolution

House majority leader Eric Cantor said he did not support the bill. Speaker John Boehner (rear) voted in favor.
House majority leader Eric Cantor said he did not support the bill. Speaker John Boehner (rear) voted in favor.

WASHINGTON — Almost 24 hours after Congress careened off the fiscal cliff, a bipartisan House of Representatives late Tuesday approved a Senate bill reversing income tax increases and pulling the nation back from the potentially calamitous economic consequences.

The vote did not come easily. House Republicans expressed staunch opposition throughout the day. They threatened amendments and huddled in closed-door strategy meetings.

But attempts within the GOP caucus to defeat or change a bill that would lower taxes on virtually all Americans fizzled as the day wore on. In the end, sufficient numbers of Republicans who were resigned to compromise joined Democrats to outvote the corps of conservatives who chose to stick to a hard line.


President Obama, speaking after the vote, said passage of the bill accomplishes one of his major goals: changing a tax code “too skewed toward the wealthy” at the expense of the middle class. “Tonight,” he said, “we’ve done that.”

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The vote was 257-167, with 85 Republicans joining Democrats to put the bill over the top, and 150 Republicans opposed. The entire Massachusetts delegation voted in favor of the bill.

Lawmakers observed that world financial markets were closely watching how the House responded to the fiscal cliff, and that the standing of America’s economy was on the line. Economists had warned that the US economy would slide into recession if the fiscal cliff tax hikes and spending cuts were allowed to take effect. Also at stake was the reputation of Congress as an institution, numerous speakers remarked on the House floor.

Some lawmakers said they were hopeful the tax deal — which also delays $110 billion in automatic spending cuts for two months — would lay the groundwork for comprehensive, bipartisan tax and spending overhauls later in the year. But with another debate over the nation’s debt ceiling looming in February, those issues are likely to be contentiously fought.

“Americans may be politically divided, but they are united in their desire to see their leaders in Washington work together to achieve results,’’ said Representative David Dreier, a moderate Republican from California giving his last speech as a member of Congress.


The measure — which Obama is expected to sign quickly — returns income taxes back to Bush-era levels for more than 98 percent of Americans, while allowing them to remain at higher levels for individuals earning more than $400,000 and married couples making more than $450,000.

While the measure passed the Senate early Tuesday morning with overwhelming Republican and Democratic support, 89 to 8, it landed with a thud in the House hours later. Republicans said it did not contain needed spending cuts to balance out the tax increases it would impose on the wealthy.

Opposition came not just from rank-and-file conservatives, but also from a high level: Representative Eric Cantor of Virginia, the number two Republican in the House.

‘‘I do not support the bill,’’ Cantor told reporters after a closed-door meeting of GOP members.

But the realities of the fiscal cliff loomed large. Driving home the consequences of not acting, the Internal Revenue Service marked the passing of the New Year’s Eve deadline by instructing employers to begin extracting more tax withholdings from employee paychecks “as soon as possible.’’


Now those instructions will be torn up, except as they relate to people in the top tax bracket, whose marginal rate will rise from 35 percent to 39.6 percent.

“Reconciling our differences was a monumental task, especially with time growing short,’’ said minority leader Nancy Pelosi, the House’s top Democrat. “The American people told us in the election they wanted us to work together.’’

The House seemed determined to act before financial markets reopened Wednesday after the New Year’s holiday. Its task was complicated by another feature of the calendar: Wednesday is the last day for the 112th Congress to take action. On Thursday, new members will arrive in Washington to be sworn in as the 113th Congress takes over, and House Speaker John Boehner will be required to ask the Republican caucus to reinstall him in his leadership post.

Boehner has struggled to lead his unruly caucus and was humiliated by conservatives two weeks ago who rejected his efforts to raises taxes on millionaires alone. On Tuesday, he listened to members of his caucus in two private meetings that spanned much of the afternoon, but notably he did not appear publicly to issue statements and he did not speak on the House floor in the final moments leading up to the vote, though he did end up voting in favor.

Just hours after the Senate approved the package at around 2 a.m. Tuesday, the White House began its effort to sell the legislation to the public and the House. Obama called upon representatives to pass the measure quickly, and Vice President Joe Biden was dispatched to Capitol Hill to brief House Democrats on the legislation.

Obama said in a statement that the measure would raise an additional $620 billion over 10 years, when compared to the period when the Bush-era tax cuts were still in place. But that is not how the Congressional Budget Office, which sets the official price tag, analyzed the measure. It starts from after midnight Monday, when those Bush tax cuts expired. Measured that way, and including a $1.8 trillion permanent fix on the alternative minimum tax, the total cost of the Senate bill is $3.9 trillion over the next 10 years.

Appearing at the White House after the vote, Obama said he would continue to work for a “balanced’’ approach to tax and spending deals in his second term.

“Hopefully in the new year, we can put a package like this together with a little less brinksmanship, a little less drama, not scare the heck out of folks quite as much,’’ Obama said.

Democrats who met with Biden in a midday meeting emerged saying they had qualms about aspects of the bill but were generally supportive. A key area of concern was that the Senate measure did nothing to solve a looming showdown over the national debt limit, which needs to be raised in February to avoid a national credit default.

Biden assured Democrats in the closed-door meeting that the White House will stand firm on the debt ceiling debate and not cave in to Republican demands for budget cuts.

“They promised that would be the case, and the president and the vice president are sincere in that,’’ said Representative Edward Markey, the Malden Democrat.

The issue is complicated, however, because the Senate bill delays the “sequester’’ budget cuts of $110 billion for two months — virtually ensuring that those cuts will be a key poker chip for the GOP.

Christopher Rowland can be reached at crowland@globe.com. Follow him on Twitter @GlobeRowland.