Fiscal Cliff Averted: House Passes Late-Night Bill

Obama says it's just 'one step' toward stronger economy

By Newser Editors and Wire Services

Posted Jan 1, 2013 7:42 PM CST | Updated Jan 1, 2013 10:31 PM CST

(Newser) – A weary Congress sent President Obama legislation to avoid the "fiscal cliff" of middle-class tax increases and across-the-board spending cuts late tonight, hours before financial markets reopen after the New Year's holiday. The bill's passage on a 257-167 vote in the House sealed a hard-won political triumph for the president less than two months after he secured re-election while calling for higher taxes on the wealthy. "Thanks to the votes of Republicans and Democrats in Congress, I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing tax hikes that could have sent the economy back into recession," Obama said minutes after the vote passed. He spoke with Joe Biden at his side, a recognition of the VP's role as the lead Democratic negotiator in final talks with Mitch McConnell.

In addition to neutralizing middle-class tax increases and spending cuts taking effect with the new year, the legislation will raise tax rates on incomes over $400,000 for individuals and $450,000 for couples. That was higher than the thresholds of $200,000 and $250,000 that Obama had sought. But remarkably, in a party that swore off tax increases two decades ago, dozens of Republicans supported the bill at both ends of the Capitol. The Senate approved the measure on a vote of 89-8 less than 24 hours earlier, and in the interim, rebellious House conservatives demanded a vote to add significant spending cuts to the measure. But in the end they retreated.

House Majority Leader Eric Cantor, R-Va., left, with Speaker of the House John Boehner, R-Ohio, enters a second Republican caucus meeting at the U.S. Capitol in Washington, on Tuesday, Jan. 1, 2013.
House Majority Leader Eric Cantor, R-Va., left, with Speaker of the House John Boehner, R-Ohio, enters a second Republican caucus meeting at the U.S. Capitol in Washington, on Tuesday, Jan. 1, 2013.   (Jacquelyn Martin)
House Minority Leader Nancy Pelosi of Calif., center, flanked by Rep. Joseph Crowley, D-NY, left, and Rep. Xavier Becerra, D-Calif., gestures during a news conference on Capitol Hill in Washington, Tuesday, Jan. 1, 2013, to discuss the fiscal cliff bill passed by the Senate last night that's waiting for a...
House Minority Leader Nancy Pelosi of Calif., center, flanked by Rep. Joseph Crowley, D-NY, left, and Rep. Xavier Becerra, D-Calif., gestures during a news conference on Capitol Hill in Washington, Tuesday,...   (J. Scott Applewhite)
House Speaker John Boehner Ohio walks to his office on Capitol Hill in Washington, Tuesday, Jan. 1, 2013, as legislation to negate a fiscal cliff of across-the-board tax increases and sweeping spending cuts moves to the GOP-dominated House following a bipartisan, middle-of-the-night approval in the Senate. Boehner is expected to...
House Speaker John Boehner Ohio walks to his office on Capitol Hill in Washington, Tuesday, Jan. 1, 2013, as legislation to negate a fiscal cliff of across-the-board tax increases and sweeping spending...   (J. Scott Applewhite)
The dome of the Capitol is reflected in a skylight of the Capitol Visitor's Center in Washington, Tuesday, Jan. 1, 2013. Squarely in the spotlight, House Republicans planned a closed-door meeting Tuesday to decide their next move after the Senate overwhelmingly approved compromise legislation negating a fiscal cliff of across-the-board...
The dome of the Capitol is reflected in a skylight of the Capitol Visitor's Center in Washington, Tuesday, Jan. 1, 2013. Squarely in the spotlight, House Republicans planned a closed-door meeting Tuesday...   (Jacquelyn Martin)
A Marine sentry stands guard, indicating that President Obama is working in the West Wing of the White House, as discussions regarding the fiscal cliff continue on Capitol Hill in Washington on Tuesday, Jan. 1, 2013.
A Marine sentry stands guard, indicating that President Obama is working in the West Wing of the White House, as discussions regarding the fiscal cliff continue on Capitol Hill in Washington on Tuesday,...   (Charles Dharapak)
House Majority Leader Eric Cantor, R-Va., left, and Speaker of the House John Boehner, R-Ohio, arrive to a second Republican caucus meeting at the U.S. Capitol in Washington, on Tuesday, Jan. 1, 2013.
House Majority Leader Eric Cantor, R-Va., left, and Speaker of the House John Boehner, R-Ohio, arrive to a second Republican caucus meeting at the U.S. Capitol in Washington, on Tuesday, Jan. 1, 2013....   (Jacquelyn Martin)
House Majority Leader Eric Cantor of Va. leaves a Republican caucus meeting on Capitol Hill in Washington, Tuesday, Jan. 1, 2013. Squarely in the spotlight, House Republicans began deciding their next move Tuesday after the Senate overwhelmingly approved compromise legislation negating a fiscal cliff of across-the-board tax increases and sweeping...
House Majority Leader Eric Cantor of Va. leaves a Republican caucus meeting on Capitol Hill in Washington, Tuesday, Jan. 1, 2013. Squarely in the spotlight, House Republicans began deciding their next...   (Jacquelyn Martin)
Vice President Joe Biden arrives for a closed-door meeting with House Democrats, on Capitol Hill in Washington, Tuesday, Jan. 1, 2013, to discuss the fiscal cliff bill passed by the Senate last night that's waiting for a vote in the Republican-controlled House. At left is Rep. Xavier Becerra, D-Calif. Biden...
Vice President Joe Biden arrives for a closed-door meeting with House Democrats, on Capitol Hill in Washington, Tuesday, Jan. 1, 2013, to discuss the fiscal cliff bill passed by the Senate last night...   (J. Scott Applewhite)
Speaker of the House John Boehner, R-Ohio, center right, and House Majority Leader Eric Cantor, R-Va., center left, walk down stairs to a second Republican conference meeting to discuss the fiscal cliff bill_ which was passed by the Senate Monday night_ at the Capitol in Washington, Tuesday, Jan. 1, 2013....
Speaker of the House John Boehner, R-Ohio, center right, and House Majority Leader Eric Cantor, R-Va., center left, walk down stairs to a second Republican conference meeting to discuss the "fiscal cliff"...   (J. Scott Applewhite)
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