The country did go off the fiscal cliff this week, but it was more like a bungee jump than a fall.
Less than 24 hours after billions of dollars in tax hikes and spending cuts went into effect, the House of Representatives agreed to a deal struck by the White House and Senate leaders and passed by the upper body of Congress on New Year’s Eve, before the year-end deadline that had been termed the “fiscal cliff.”
The deal, which includes a higher tax rate on incomes over $400,000 for individuals and $450,000 for couples, higher taxes on capital gains and dividends and the extension of unemployment benefits, was hashed on New Year’s Eve with the help of Vice President Joe Biden and Senate Republican leader Mitch McConnell (R-Kentucky). The deal was passed by the Senate 89-8 less than two hours before midnight on New Year’s Eve, setting the stage for the House of Representatives to vote on it on the first day of 2013, after the fiscal cliff deadline but before effects of the cuts and tax hikes could be felt.
But House Speaker John Boehner (R-Ohio) stalled the bill on Tuesday as many in the GOP caucus expressed opposition to it, most notably House Majority Leader Eric Cantor (R-Virginia), Boehner’s second-in-command. In the end, the House passed the bill 257-167 with most Republicans opposing and most Democrats supporting.
All of Queens’ representatives voted for the bill, including Reps. Bob Turner (R-Middle Village) and Gary Ackerman (D-Bayside), each casting what was likely to be his final vote in Congress. Their terms end at noon today. Rep. Steve Israel (D-Long Island), who will represent portions of Northeast Queens in the new Congress, also voted yes.
“Tonight was a time for compromise and bipartisanship,” said Rep. Joe Crowley (D-Queens/Bronx) in a statement immediately released after the vote. “It is what hard working Americans wanted and deserved, and I’m pleased that we ultimately came together to stop a tax hike from hitting the vast majority of Americans.”
The deal was met with some ire among those on the right and the left. Some more conservative members of Congress were angry that the deal did not include spending cuts and included tax hikes for wealthy Americans. An attempt to amend the bill with spending cuts and send it back to the Senate did not materialize. Some liberal Democrats felt the deal compromised too much on tax rates and opened up another battle over the country’s finances later this winter when another similar deadline is scheduled. They argued that President Obama would have less leverage over Republicans in that battle. The GOP will still control the House of Representatives in the next Congress, albeit with a slightly smaller majority. Democrats picked up nine seats in the body in the 2012 elections and hold a 10-seat majority in the Senate.
Rep. Greg Meeks (D-Jamaica) acknowledged the bill’s critics from the left, but said the deal includes some key benefits that needed to be passed.
“While some folks are upset that the President and Congress have compromised and lowered taxes at a threshold higher than the level President Obama campaigned on, going over the fiscal cliff is not an option for the two million Americans who rely on unemployment benefits, or for the 25 million American families and students who utilize the Child Tax Credit and Earned Income Tax Credit,” he said.
President Obama signed the bill into law Tuesday night.