• Fiscal cliff deal: House OKs proposal despite GOP objections

    President Obama praised lawmakers and Vice President Joe Biden after the House of Representatives voted to pass a Senate measure to avert the most serious impacts of the so-called fiscal cliff.

    By Michael O'Brien, NBC News

    Updated at 12:32 a.m. ET: An agreement to stave off the harshest and most immediate consequences of the fiscal cliff won approval in the House late Tuesday. President Barack Obama signed the law on Wednesday night, the battle over which foreshadowed more fights with Congress over spending.

    Following a day of hectic wrangling on Capitol Hill — where the prospects for passing the bipartisan, Senate legislation regarding the fiscal cliff hung in the balance for much of New Year's Day — the House voted 257 to 167 to pass the belated compromise measure over the objections of many conservative Republicans.

    The legislation takes steps toward resolving the combination of automatic tax hikes and spending cuts that took effect at midnight on Jan. 1. It preserves tax rates as they were at the end of 2012, except for those individuals earning more than $400,000 and households earning over $450,000. It also allows taxes on capital gains and dividends to go up, and extends benefits of the unemployed. Additionally, the Senate bill delays the onset of the "sequester" — the swift, automatic spending cuts — for two months. 

    Fiscal cliff compromise leaves few satisfied

     

    "Thanks to the votes of Democrats and Republicans in Congress I will sign a law that raises the taxes on the wealthiest of Americans," Obama said in remarks at the White House Tuesday, "while preventing a middle-class tax hike."

    The House vote laid bare some of the internal ideological divisions to plague the GOP over the past two years. More Republican congressmen (151) voted against the Senate bill than for it (85), meaning that Democrats' support was needed to advance the final deal. House Speaker John Boehner, R-Ohio, took the rare step of casting a vote, and did so in favor of the legislation. Rep. Paul Ryan, R-Wis., the former Republican vice presidential nominee, also supported the package. But Boehner's top two lieutenants, Majority Leader Eric Cantor, R-Va., and Majority Whip Kevin McCarthy, R-Calif., each opposed the deal.

    The House voted Monday to approve the Senate's fiscal cliff bill by a vote of 257-167. Richard Lui, Luke Russert and Mike Viqueira report on MSNBC.

    "Now the focus turns to spending," Boehner said in a statement following the House vote. "The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt."

    While the last-minute action on Capitol Hill essentially mitigates much of the risk posed to the U.S. economic recovery by the fiscal cliff, it hardly brings resolution to the bitter and often intractable fight in Washington over taxes and spending. The first half of 2013 will feature battles in Congress over raising the debt limit, continuing basic government funding and the expiration of this two-month delay in the sequester. 

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    Obama nodded to those looming fights in his remarks Tuesday evening, renewing his call for "balance" in any solution in the coming year to address deficits and debts. But the president also sternly warned Congress against using the debt ceiling as a bargaining chip, as Republicans had in summer of 2011.

    "While I'll negotiate over many things, I will not have another debate with this Congress over whether to pay the bills they have racked up," Obama said.

    PhotoBlog: Deal done, Obama heads back to Hawaii with a weary wink

    The fiscal cliff itself was the product of discord in Congress resolving those very issues. And the difficulty in attaining even this less ambitious piece of legislation — versus the kind of "grand bargain" Obama had first sought in talks with Republicans — offered a cautionary tale for the 113th Congress, in which the House and the Senate remain controlled by the same parties as during the past two years. 

    Squabbling
    And even for much of Tuesday, House approval of the fiscal legislation — which was negotiated by Senate Minority Leader Mitch McConnell, R-Ky., and Vice President Joe Biden — was far from certain. GOP leaders were forced to cajole conservatives who complained the fallback deal contained insufficient spending cuts. Only after it became clear that Republicans wouldn't have the votes to amend the Senate proposal — which the upper chamber said it wouldn't even consider — did House Speaker John Boehner, R-Ohio, bring the bill to the floor. 

    The squabbling was familiar to any observers of Congress during the past two years. This divide almost resulted in a government shutdown and a default on the national debt in 2011. It again threatened Tuesday to allow the painful, across-the-board tax hikes and spending cuts to play out just as the U.S. economic recovery showed signs of accelerating.

    PhotoBlog: See images of Congress working overtime to avoid fiscal cliff

    And this deal just approved by Congress in the waning hours of 2013's first day all but ensures that much of the coming year will be dominated by similar battles in Washington. Republicans are hopeful they might be able to extract more spending cuts and entitlement reforms with the government up against other deadlines, like the one needed this spring to authorize more government borrowing. 

    That could complicate Obama's already-ambitious second term agenda. The president said just this past Sunday on NBC's "Meet the Press" that he will seek comprehensive immigration reform legislation and new laws to address gun violence.

     

     

  • With Cantor opposed, House vote on fiscal cliff compromise remains in doubt

    By Mike Viqueira, Luke Russert and M. Alex Johnson, NBC News

    Resistance from House Republicans, including Majority Leader Eric Cantor, threw into doubt whether a last-minute compromise measure to pull the U.S. back from the so-called fiscal cliff could come to a vote Tuesday.

    With just two days to spare, House Republicans were in a series of meetings to figure out how to respond to the Senate's 89-8 vote in the middle of the night to stave off a series of tax increases and steep spending cuts automatically taking effect in the new year.

    Rep. Steven LaTourette, R-Ohio, explains why some House Republicans, including Majority Leader Eric Cantor, opposed the Senate-backed fiscal bill.

    Cantor, the No. 2 House Republican behind Speaker John Boehner, told reporters Tuesday that he didn't support the agreement and that no decisions on how to move forward had been made.

    Rep. Steven LaTourette, R-Ohio, told NBC News that while he was personally inclined to vote for the agreement because he didn't want to hold the country "hostage,"  the consensus among his fellow Republicans was that "it's heavy on tax increases and it has nothing on spending reductions."

    "From a Republican standpoint, that's not the balanced approach the president was talking about," he said.

    A Republican lawmaker told NBC News on condition of anonymity that at the Republican meeting, 37 of 40 members who spoke on the bill opposed it. He said many of his colleagues were demanding "illogical concessions," including billions of dollars in extra spending cuts that Democrats wouldn't be able to live with.

    House Majority Leader Eric Cantor reportedly is opposed to the Senate-approved fiscal bill. NBC's Mike Viqueira reports.

    The Republican majority in the House is likely to send the bill back to the Senate with amendments to cut more spending, said Rep. Spencer Bachus, R-Ala.

    "I would be shocked if this bill didn't go back to the Senate," he said. "I think we're there on more revenue, but, you know, there is more revenue but no spending cuts."

    Democratic House members, including Minority Leader Nancy Pelosi, called on Republcans to bring the measure to an up-or-down vote.

    The Senate adjourned until Wednesday, meaning it wouldn't consider any House amendments Wednesday.

    The 113th Congress, meanwhile, is scheduled to be sworn in Thursday. Unless the current Congress can reach an agreement, the next Congress would have to start fresh to find a fix.

    As the Republicans' discussions wore on, House Democrats convened a news briefing to press them to approve the compromise as is.

    Democratic leader Nancy Pelosi of California called for "a straight up-or-down vote on what the Senate passed last night," saying: "I think that we've made gigantic progress."

    And Rep. Xavier Becerra, D-Calif., said: "We hope the House will respect the wishes of the people's representatives and allow members to vote."

    The Senate measure would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000. It would also block spending cuts for two months, extend jobless benefits for the long-term unemployed, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.

    The high-stakes drama appeared to have been resolved after days of back and forth between Vice President Joe Biden and Seate Republican leader Mitch McConnell of Kentucky, who finally came to an agreement late Monday.

    The measure was then taken to the Senate floor, where it passed by an overwhelming majority of 89-8. Senators who voted against it included Republicans Marco Rubio of Florida, Rand Paul of Kentucky and Richard Shelby of Alabama.

    NBC's Luke Russert explains why House Speaker John Boehner's meeting with House Republicans is critical to the Senate-approved fiscal deal.

    President Barack Obama acknowledged the difficulties the parties had coming to an agreement and pushed the House to quickly approve the bill in a statement just after the Senate vote.

    "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," the statement said. "This agreement will also grow the economy and shrink our deficits in a balanced way — by investing in our middle class, and by asking the wealthy to pay a little more."

    Squabbling far from over
    Boehner so far has refused to endorse the agreement. Iin a statement issued Tuesday by his office, Boehner and Cantor said, "The lack of spending cuts in the spending was a universal concern among members in today's meeting."

    In addition to the battle the legislation faces in the House, there are several other difficult issues that political leaders will be forced to revisit over the coming weeks and months, including cuts to defense and other domestic programs, as well as the debt ceiling, the subject of a mammoth congressional brouhaha last year.

    The imposed delay would allow the White House and lawmakers time to regroup before plunging very quickly into a new round of budget brinkmanship, certain to revolve around Republican calls to rein in the cost of Medicare and other government benefit programs.

    In a frantic rush of negotiations on New Year's Eve, the Senate voted for a compromise that would increase tax rates on those making above $400,000 a year. NBC's Kelly O'Donnell reports and NBC political director Chuck Todd offers analysis.

    The measure would raise the top tax rate on large estates to 40 percent, with a $5 million exemption on estates inherited from individuals and a $10 million exemption on family estates. At the insistence of Republicans and some Democrats, the exemption levels would be indexed for inflation.

    Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.

    The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.

    Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.

    NBC News' Kelly O'Donnell contributed to this report.

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