Cliff Averted

Fiscal cliffThis week, the Republican-controlled United States House of Representatives approved President Obama’s proposal to end previously enacted income tax cuts for the wealthiest Americans. The vote of 257 to 167 came within 24 hours of the Senate announcing their support for the legislation.

The bill extends current tax rates to households whose wages and investment profits are less than $450,000 a year. It also continues to fund unemployment benefits for the 2 million unemployed Americans and postpones impending budget cuts to the Pentagon. 172 Democrats and 85 Republicans voted in favor of the measure, including House Speaker John Boehner (R-Ohio) and Rep. Paul Ryan (Wis.).

The GOP has been collectively vocal about refusing to support legislation that increases taxes for anyone, even turning down Speaker Boehner’s proposed compromise to end tax cuts for only households making $1 million or more a year. However, with tax cuts for all set to expire in less than 24 hours, many Republicans decided that approving the bill was the right thing to do for their constituents.

Republicans Rep. Lou Barletta (R-Pa.) explained his vote of support, saying “I don?t know if playing chicken with the American people at this point is in the best interest of the people.”

Once signed by the president, the top tax rate will rise from 35 percent to 39.6 percent. The tax increases for married couples making more than $450,000 a year and single individuals making $400,000 a year are projected to generate $620 billion in new revenue.

Americans in the lower tax brackets will still see some tax increase in 2013, as payroll tax cuts adopted two years ago are set to expire. Also, Congress members will not receive the $900 pay increase they expected this year.

The bill had bipartisan support in the Senate, garnering 89 votes of approval. The rare show of unity came days before the current Congress ends on Thursday. However, Democrat Michael F. Bennet (Colo.). opposed the bill, noting that the Congressional Budget Office projected a $4 trillion increase in the national debt over the next ten years if the measure passed.

The legislation also ensures that estates worth $5 million – $10 million will not be taxed, and exemption is likely to increase to $15 million over the next 10 years. House Minority Leader Nancy Pelosi (D-Calif.) was quick to praise the bill, proclaiming, ?It?s long overdue for us to have this solution to go forward and remove all doubt as to what comes next for our country.”

Speaker Boehner remained neutral while his party expressed concerns over the measure behind closed doors. Many Republicans lamented that the bill did not cut government spending, which is why so many of them voted to oppose it.

Rep. Steven C. LaTourette (R-Ohio), who will retire on Thursday, voiced his discontent with the Senate’s proposal. ?We should not take a package put together by a bunch of sleep-deprived octogenarians on New Year?s Eve,” he told his fellow party members.

Senate Majority Leaser Harry Reid made clear that his party would reject any amendments from the House, leaving them responsible for tax increases for all. Republican leaders surveyed their representatives to see if a proposal to add a package of spending cuts to the bill would garner substantial support, but by 8p.m. the party was ready to vote on the Senate’s bill.

Chairman of the tax-writing Ways and Means Committee Rep. Dave Camp (R-Mich.) defended his vote to approve the bill, saying that it will make ?permanent tax policies Republicans originally crafted? while President George W. Bush was in office.