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Senate yes to fiscal cliff deal, House not clear

Biden in Washington on Tuesday. (AFP)

Jan. 1: Congressional efforts to head off tax increases on most working Americans shifted to the House, where members began to pore over details of a plan passed by the Senate in the early morning hours as Republican leaders began the delicate task of assessing the measure’s fate in their chamber.

House Republicans planned to meet to discuss the Senate legislation, cobbled together after furious negotiations between Vice-President Joseph R. Biden Jr. and the Republican Senate leader, Mitch McConnell, to avert automatic tax increases for all but the wealthiest Americans and put off, for two months, large cuts to the Pentagon and other areas of government.

Representative Nancy Pelosi of California, the House Democratic leader, said she would also present the plan to House Democrats and Biden, who helped sell the deal to Senate Democrats last night, was to meet members of his party in the House.

“You surely shouldn’t predict how the House is going to vote,” Biden said late yesterday. “But I feel very, very good.”

“This shouldn’t be the model for how to do things around here,” Senator McConnell said. “But I think we can say we’ve done some good for the country.” The deal would make permanent the alternative minimum tax “patch” that was set to expire, protecting middle-income Americans from being taxed as if they were rich.

With just two days to go before a new Congress convenes, the House has essentially three choices: reject the bill, pass it as written by the Senate after what is certain to be a robust, even rancorous debate, or amend the bill and quickly return it across the rotunda to the Senate.

Should the House choose to amend the measure, it would almost certainly imperil its chances of becoming law before the new Congress convenes. The Senate compromise, which enjoyed wide bipartisan support, was so hard fought that senators do not anticipate taking another vote on it.

Any failure to pass the measure before the 112th Congress ends at noon on Thursday would require 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.

But the strong, bipartisan 89-to-8 vote in the Senate about 2am today will put strong 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 warn could send the nation back into a recession.

Yet it was clear this morning that many House Republicans were disenchanted with the plan, which, while containing many concessions that angered Democrats, still favours the latter party’s priorities and imposes a tax increase on the wealthiest Americans.

“I am halfway through reading it and haven’t found the cuts yet,” said Representative Trey Gowdy of South Carolina, who generally votes against budget bills. “It’s part medicinal, part panacea, and part treating the symptoms but not the underlying pathology.”

Democrats have their own issues with the measure due to what they see as too many concessions on taxes, making it apparent some combination of Democrats and Republicans will have to come together behind the measure if it is too clear the House and be sent to President Obama for his signature.

Speaker John A. Boehner and Representative Eric Cantor of Virginia, the House majority leader, arrived at the Capitol early today to begin working, but a spokesman for Cantor, Doug Heye, said no decision had been made on how to proceed.

As New Year’s Day approached, members were thankful that the financial markets were closed, giving them a second chance to return today to try and blunt the worst effects of the fiscal mess.

There is no major difference whether a law is passed on Monday night, Tuesday or Wednesday. Legislation can be backdated to January 1, for instance, said law firm K&L Gates partner Mary Burke Baker, who spent decades at the Internal Revenue Service.

“This is sort of like twins — one being born before midnight and one being born after. I think the date that matters is the day the President signs the legislation,” she said.

Republicans are pushing for savings in the Medicare and Social Security healthcare and retirement programmes and threatening to block an increase in the debt limit — which caps how much debt the federal government can hold — in February unless they get their way.

 
 
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