Pelosi Delivers Democrat Votes to Evert Fiscal Cliff

130910_nancy_pelosi_ap_605WASHINGTON — House Republicans finally agreed to allow a vote on the Senate approved bill, to avert the Fiscal Cliff, after spending all day doing nothing, as the reality of the Fiscal Cliff loomed. Earlier today, the Republican members of the house seemed prepared to embrace the Fiscal Cliff and not vote on the bill supported by bi-partisan support in the Senate. By early evening, it became apparent that the votes did not exist to vote for an amendment to the Senate bill and the realization of the Fiscal Cliff brought a brief sense of reality to the Republican members.

A strong bi-partisan procedural vote of 408 votes were cast to proceed with the vote for the Senate bill. The vote occured in the late evening hours. The bill passed 257-167. Nancy Pelosi delivered 172 Democratic Yes votes; 16 Democrats voted No. 85 Republicans voted Yes and 151 voted No.

Representative Eric Cantor of Virginia, the No. 2 Republican, and the No. 1 nemesis to the Speaker, indicated to his colleagues earlier that he could not support the legislation in its current form. Many other Republicans were voicing their objections to a plan that they saw as raising taxes while doing little to rein in spending. Canter continued to undermine Speaker John Boehner as everyone waited for the up or down vote promised by the Speaker. Minority leader Nancy Pelosi demanded the legislation passed by the Senate be brought to an up or down vote.

Aides said that Speaker John A. Boehner, who had pledged to put any measure the Senate passed on the House floor for a vote, was mainly listening to the complaints of his rank and file “do nothing” teabaggers and had not taken a firm position on the legislation, though he had clear reservations. In the end, the Speaker voted for the bill.

The situation loomed as another failed significant test for Mr. Boehner, who had been unable to pass his own proposal to increase taxes only on $1 million in income and above or control his members. He has said repeatedly that he would allow a vote on the Senate bill, but he has also said he did not want to pass a bill requiring a majority of Democratic votes. In the end, it did take Democrats to pass the bill. Public opposition from Mr. Cantor, once again, undermined the Speaker, who has up to this point [appeared] to side with Mr. Boehner in the fiscal fight, mystically managed to again complicate the Speakers position.

The 112th Congress comes to a close at 11:59 on Thursday.

It appeared that members favored amending the measure and sending it back to the Senate. Attempts included an Amendment to add 300 billion in spending cuts to the Bill. Mr. Boehner was unable to garner enough votes to support an Amendment. Harry Reed promised warned that he would not accept any changes to the bill; which passed 89-8.

Any failure to pass the measure before the 112th Congress ends as of noon Thursday and would have required the process to start over in the new 113th Congress, meaning the Senate would have to vote again with a changed membership due the departure of several veteran lawmakers and the arrival of newcomers from both parties as a result of victories in the November elections.

Failure to act put pressure on the House to approve the legislation since a defeat would essentially leave the House responsible for a steep series of tax increases and spending cuts that some economists warned could/would send the nation back into a recession.

The bill included the following highlights:

—Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.

—Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.

—Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15 percent to 20 percent.

—Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.

—Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, the earned income tax credit, and an up-to-$2,500 tax credit for college tuition. Also extends for one year accelerated “bonus” depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.

—Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.

—Cuts in Medicare reimbursements to doctors: Blocks a 27 percent cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.

—Social Security payroll tax cut: Allows a 2-percentage-point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.

—Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rule changes on converting traditional individual retirement accounts into Roth IRAs.

—Continue Farm subsidy for grain that will prevent the price of milk doubling.

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