It took until after 2 a.m. on the morning of January 1, 2013 — a few hours after the Bush tax cuts had technically expired — but the Senate passed legislation that will reinstate tax cuts for middle-class taxpayers, and lock in a variety of higher rates on income above $450,000.
The final vote was 89-8.
Opposing the legislation were Democratic Sens. Tom Carper (D-DE), Tom Harkin (D-IA), and Michael Bennet (D-CO) along with Republican Sens. Mike Lee (R-UT), Richard Shelby (D-AL), Rand Paul (R-KY), Chuck Grassley (R-IA), and Marco Rubio (R-FL).By passing the legislation with overwhelming support from members of both parties, the Senate has handed House Speaker John Boehner (R-OH) responsibility for following suit, and averting the vast majority of the austerity measures in the so-called fiscal cliff.
Just days ago, Boehner was unable to round up sufficient support in the House for legislation that would have locked in the Bush tax cuts for income up to $1 million. The Senate-passed legislation raises significantly more revenue than Boehner’s plan would have, and will provide the Treasury with more than $600 billion than it would have collected over the next 10 years if all the Bush tax cuts had been extended.
For that reason, and because House Minority Leader Nancy Pelosi has held her cards close to her vest, House passage remains unclear. It may require Boehner to break the so-called Hastert rule, that legislation does not come to the floor without the support of more than half of the majority party.
But it’s not all upside for Democrats, substantively or strategically. The bill approved by the Senate does not resolve the so-called sequester: deep spending cuts to everything from defense to the social safety net. Instead, it delays the sequester for two months.
Many in the party are particularly concerned that the fiscal cliff bill deals Democrats a losing hand, setting up an enormous March fight over federal spending, when government funding bills will have to pass, the sequester kicks in, and the debt limit has to be increased.
At a private meeting with Senate Dems late Monday night, Vice President Joe Biden sought to reassure members of his own party that President Obama will not blink if the GOP renews demands for deep spending cuts as a requirement for raising the debt limit.
But the White House’s willingness to concede in this fight troubles Capitol Hill Dems who, according to one senior Democratic aide, have “diminished confidence” that the Obama administration has the resolve to fully stare down the Republican Party.