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Posts tagged "Fiscal Cliff"

Until last night, the conventional wisdom in Washington was that the Tea Party was on the wane. Congressional leaders of the nascent movement, like Allen West and Joe Walsh had lost reelection, or, like Jim DeMint, had decided to leave politics altogether.  House Speaker John Boehner had stripped some of the more outspoken members of the Tea Party caucus of their congressional leadership posts, a sign that the GOP establishment was no longer going to be led by its ultra-conservative tail.  The big money groups backing the Tea Party were falling apart in a spate of post-election season squabbling.

But after 85 House Republicans joined Boehner in raising taxes without spending reductions during the end game of Monday night’s fiscal-cliff negotiations, Tea Party leaders and conservative activists from around the country are dusting off their tri-corner hats and “Don’t Tread On Me” signs, and now say that their members are as energized as they have ever been since the first Tax Day protests in 2009. And the Republican Party, they add, had better beware.

“We now have 85 members of the House who have shunned their noses at us,” said Dustin Stockton, a Texas- and Nevada-based operative and the chief strategist of The Tea “Our job now is to recruit and inspire and motivate people to run against those Republicans who did it.”

For Tea Partiers and fiscally conservative Republican rank-and filers, the Congress that ended its term this week was at last a chance to get federal spending under control. Hopes were high that this class, which more than doubled the number of members in the House’s Tea Party caucus on their first day, would repudiate previous Republican tendencies to reverse campaign promises and open up the spending spigot as soon as they had their hands on it. And if these newly minted members failed, the Tea Party promised to rally its energy behind new challengers who wouldn’t.

Instead however, this Congress voted to increase spending three times, and never once to cut taxes. The final indignity, the bill to avoid the so-called “fiscal cliff” by raising taxes on the wealthiest, was negotiated behind closed doors and at the last minute, anathema to a group that had pledged unprecedented openness around legislation. Plus, as many Tea Party leaders around the nation pointed out, the bill that was passed this week includes $1 dollar of spending reductions for every $41 of new taxes.

h/t: The Daily Beast

As of this writing, every single state except Hawai’i has finalized its vote totals for the 2012 House elections, and Democrats currently lead Republicans by 1,362,351 votes in the overall popular vote total. Democratic House candidates earned 49.15 percent of the popular vote, while Republicans earned only 48.03 percent — meaning that the American people preferred a unified Democratic Congress over the divided Congress it actually got by more than a full percentage point. Nevertheless, thanks largely to partisan gerrymandering, Republicans have a solid House majority in the incoming 113th Congress.

A deeper dive into the vote totals reveals just how firmly gerrymandering entrenched Republican control of the House. If all House members are ranked in order from the Republican members who won by the widest margin down to the Democratic members who won by the widest margins, the 218th member on this list is Congressman-elect Robert Pittenger (R-NC). Thus, Pittenger was the “turning point” member of the incoming House. If every Republican who performed as well or worse than Pittenger had lost their race, Democrats would hold a one vote majority in the incoming House.

Pittenger won his race by more than six percentage points — 51.78 percent to 45.65 percent.

The upshot of this is that if Democrats across the country had performed six percentage points better than they actually did last November, they still would have barely missed capturing a majority in the House of Representatives. In order to take control of the House, Democrats would have needed to win the 2012 election by 7.25 percentage points. That’s significantly more than the Republican margin of victory in the 2010 GOP wave election (6.6 percent), and only slightly less than the margin of victory in the 2006 Democratic wave election (7.9 percent). If Democrats had won in 2012 by the same commanding 7.9 percent margin they achieved in 2006, they would still only have a bare 220-215 seat majority in the incoming House, assuming that these additional votes were distributed evenly throughout the country. That’s how powerful the GOP’s gerrymandered maps are; Democrats can win a Congressional election by nearly 8 points and still barely capture the House.

Partisan gerrymanders, like the one that now all but locks the GOP majority in place, have been the subject of repeated court challenges. America can thank the five conservative justices on the Supreme Court for allowing these gerrymanders to continue.

h/t: Ian Millhiser at Think Progress Justice

America’s long-running fiscal cliff crisis was finally resolved on Tuesday night when Congress voted in favour of a White House compromise that will impose tax rises on the wealthiest and spare the working-class and middle-class.

Barack Obama, in a statement to reporters at the White House, hailed it as a fulfilment of his election campaign promise.

"The central premise of my campaign for president was to change the tax code that was too skewed towards the wealthy at the expense of working, middle-class Americans. Tonight we have done that," he said.

Obama, who broke off his holiday with his family in Hawaii to return to Washington to see the crisis resolved, left minutes later to fly back to Honolulu.

Already the Republicans are gearing up for fresh confrontations as early as next month over spending cuts and the debt ceiling.

Obama called instead for a more bipartisan approach on issues such as spending cuts. “The one thing I think hopefully in the new year we will focus on is seeing if whether we can put a package like this together with a little bit less drama, a little less brinkmanship, not scare the heck out of folks quite as much,” the president said.

The end of the fiscal cliff drama came when a large bloc of House Republicans, who had stubbornly opposed the bill, caved in and reluctantly joined Democrats to pass it comfortably by 257 to 167.

It exposed the extent of the Republican ideological divide, with 85 voting for and 151 unable to swallow the deal. The Democrats were more cohesive, with only 16 Democrats voting against.

The House vote came after the Senate passed the bill in the early hours of Tuesday morning.

The bill is a short-term, messy compromise. Without the bill, every taxpayer in America would have faced rises from 1 January. Instead, the increases are confined to the top 2% wealthiest part of the population.

The bill also blocked automatic cuts in federal programmes from defence to welfare due to kick in on 1 January. A decision on cuts has been postponed for two months. 

The Congressional vote amounts to only a partial victory for Obama.
He had promised the new taxes would kick in at $250,000 but, to the dismay of left-wing Democrats, agreed to compromise, in the face of Republican opposition, on $450,000. The Republicans had wanted the threshold set at $1 million.

America went over the ‘fiscal cliff’ at midnight on 31 December, with every taxpayer facing an automatic rise. The rises proved temporary. The new legislation reverses this, removing the increases from all but the wealthiest.

The White House had warned that failure to reach a deal could unsettle the markets as well as slow economic recovery. It is hoping the deal will calm the markets when Wall Street reopens on Wednesday.

Obama, feeling empowered by his election victory in November, had been hoping that he might at last be able to tame the Republican House members, many of them Tea Party-backed.

Although he won a small victory over the fiscal cliff, it is far from the crushing one he had been hoping for. House Republicans are already planning a series of new showdowns, beginning next month over spending cuts and the debt ceiling.

Obama originally proposed a ‘grand bargain’ to deal with all the remaining issues in the hope that he would avoid these regular and debilitating stand-offs with Congress.

Mitch McConnell, the Republican leader in the Senate, within minutes of Tuesday’s vote, flagged up the coming battles ahead over spending and the debt ceiling.

So too did the Republican House Speaker John Boehner, who said: “Now the focus turns to spending. The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable.”

But Obama insisted he had enough of such confrontation. If Congress decides to make an issue of raising the debt ceiling, it would be responsible for the “catastrophic” consequences.

h/t: The Guardian


Legislation to block the ‘fiscal cliff’ was passed by the US House late on Jan. 1, 2013 and sent to the White House for President Obama’s signature.

The president later hailed passage of the bill as “one step” in the effort to strengthen economy.

The bill voided, for now, the major tax increases and government spending cuts that had been scheduled to take effect with the new year.

 Final approval came in the House near 11pm ET on on New Year’s Night. The vote was 257 to 167. The Senate passed the bill less than 24 hours earlier.

The bill raises tax rates on incomes over $400,000 for individuals and $450,000 for couples, a victory for Obama.

More from NBC News here.



In which logic flips itself on its head and introduces new wrinkles.

Grover Norquist = idiot to the core.

House Republicans have decided to vote Tuesday night on Senate-passed legislation to avert the fiscal cliff — without any amendments.

The news that the Rules Committee will move the bill to the House floor in the evening comes after drama-filled day that nearly scuttled the bipartisan deal that passed the Senate by a 89-9 vote in the first few hours of 2013.

Rep. Rich Nugent (R-FL) predicted that the fewer than half of all House Republicans would vote for the bill without an amendment to add spending cuts. He said Speaker John Boehner (R-OH) has indicated he would vote for it but said the speaker isn’t pushing GOP members to do so, saying they should vote their consciences.

Boehner probably won’t need half of his members because House Minority Leader Nancy Pelosi (D-CA) said the legislation would garner strong Democratic support. The move still represents a landmark for the speaker, who has habitually refused to bring up legislation that lacks the support of at least half of his members. But by breaking his rule this time, Boehner insulates himself from the blame for the fiscal cliff.

The bill, if it becomes law, would avert most tax hikes on middle class earners and postpone automatic cuts to defense and domestic programs by two months.

h/t:  Sahil Kapur at TPM

WASHINGTON — Three influential conservative groups that helped to defeat Speaker John Boehner’s “Plan B” before Christmas called for a “no” vote on the fiscal cliff deal struck by the White House and the Senate. The calls of opposition from these groups appear to have been heard by House Republicans, who are refusing to support the deal passed by the Senate.

The ultra-conservative Club for Growth stated, “This bill raises taxes immediately with the promise of cutting spending later. Tax rates will go up on marginal income, capital gains, dividends, and even certain estates when a person passes away. But it also delays the sequester for at least two months, breaking the promise made by Congress in 2011 to cut government spending. And, among other things, it includes an unpaid for extension of unemployment benefits.”

Heritage Action, the political arm of the Heritage Foundation, echoed these concerns, “To be clear, this is a tax increase. … Heritage Action opposes the kick-the-can tax increase and will include it as a key vote on our legislative scorecard.”

FreedomWorks President and CEO Matt Kibbe opposed Senate passage of the dealand wrote to his group’s members to call their senator to express their opposition. “I urge you to call your state’s two U.S. Senators and ask them to vote NO on the McConnell-Obama bill to raise taxes and postpone the promised sequester savings. We will count any vote on this proposal as a KEY VOTE when calculating the FreedomWorks Economic Freedom Scorecard for 2012.”

A fourth group, the Koch brothers-controlled Americans for Prosperity, stopped short of calling for supporters to oppose the deal, but did blast both the deal’s contents and the way it was being passed.

"The package is being rushed through at the last minute, possibly voiding the Speaker’s promise that the country would be able to review legislation for three days before the House voted on it. Much like the President’s health care law, it looks like we’ll have to pass the tax bill to find out what’s in it," Americans for Prosperity policy director James Valvo wrote on AFP’s blog.

H/T: HuffPost

Washington (CNN) – House Majority Leader Eric Cantor said Tuesday he opposes the Senate version of the fiscal cliff bill, as the hours wind down for the House to vote on a deal that would avert a combination of tax hikes and spending cuts.

"I do not support the bill," Cantor told reporters while leaving a House GOP meeting.

After the Senate passed the legislation in the early hours of the morning with 89 senators in favor of the deal, the ball is now in the House’s court to act.

Cantor said no decisions have been made on the bill and leaders are looking for the best path forward.

Meanwhile, several members said they were unsure whether the House would vote Tuesday.


After weeks of uncertainty, bluffing and posturing in Washington D.C., the Senate voted in the early hours of Tuesday morning to avoid the “fiscal cliff” of tax increases and spending cuts. However, the fiscal bargaining is far from over and more budget drama is likely on the way.

The deal brokered by Vice President Joe Biden and Senate Republican Leader Sen. Mitch McConnell of Kentucky would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000.

The measure will now be turned over to the House, which needs to give its backing and will hold a session on Tuesday starting at noon.

House Speaker John Boehner — the top Republican in Congress — said the House would consider the Senate deal. But he left open the possibility of the House amending the Senate bill, which would spark another round of legislating.

"The House will honor its commitment to consider the Senate agreement if it is passed. Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members … have been able to review the legislation," Boehner and other House Republican leaders said in a statement.

Next big fight
Although the Senate agreed at the last minute to avert broader tax increases, the very idea of a “deadline” has lost some of its meaning since each budget deal seems to be merely a prelude to another fixed date when some critically important action must be taken – next up: Congress will have to decide what to do about the “sequester” spending cuts which will come up again in February, as well as decide in March on whether to increase the federal borrowing limit.

Congress is also set to embark on fundamental tax reform legislation in the New Year – as Obama himself seemed to acknowledge Monday when he said he’s intent on “doing some more work to reform our tax code so that wealthy individuals, the biggest corporations can’t take advantage of loopholes and deductions… that aren’t available to most Americans. So there’s still more work to be done in the tax code to make it fair….”

The indecision over taxes, spending, and borrowing has become chronic, in part a reflection of the fact that neither party controls both the executive and legislative branches. Ever since the Republicans won the House in 2010, the intermittent rounds of bargaining between GOP congressional leaders and Obama have run aground over the fundamentals: the future cost of the entitlement programs — especially Medicare — and who should bear the burden of paying for their growth.

The two sides’ clashing definitions of “fairness” make it hard for them to decide who should be paying a bigger tax bill.

And while tax revenues have been increasing – they’re up 10 percent in the first two months of fiscal year 2013 even under the current tax law — the increase, even if it is sustained, won’t be enough to pay for future benefits that have been promised.

Domestic spending in the cross-hairs
As part of an accord with GOP leaders last year to raise the government’s borrowing limit, Obama signed the Budget Control Act. The law requires about $100 billion in spending reductions in 2013, out of a total of roughly $3.5 trillion in spending.

While an approximately 3 percent cut in spending might not seem drastic, the Budget Control Act exempts most entitlement spending from the cuts, so the reductions would be concentrated on military outlays and domestic discretionary spending programs ranging from air traffic control to immigration enforcement.


It took until after 2 a.m. on the morning of January 1, 2013 — a few hours after the Bush tax cuts had technically expired — but the Senate passed legislation that will reinstate tax cuts for middle-class taxpayers, and lock in a variety of higher rates on income above $450,000.

The final vote was 89-8.

Opposing the legislation were Democratic Sens. Tom Carper (D-DE), Tom Harkin (D-IA), and Michael Bennet (D-CO) along with Republican Sens. Mike Lee (R-UT), Richard Shelby (D-AL), Rand Paul (R-KY), Chuck Grassley (R-IA), and Marco Rubio (R-FL).

By passing the legislation with overwhelming support from members of both parties, the Senate has handed House Speaker John Boehner (R-OH) responsibility for following suit, and averting the vast majority of the austerity measures in the so-called fiscal cliff.

For that reason, and because House Minority Leader Nancy Pelosi has held her cards close to her vest, House passage remains unclear. It may require Boehner to break the so-called Hastert Rule, that legislation does not come to the floor without the support of more than half of the majority party.

But it’s not all upside for Democrats, substantively or strategically. The bill approved by the Senate does not resolve the so-called sequester: deep spending cuts to everything from defense to the social safety net. Instead, it delays the sequester for two months.

Many in the party are particularly concerned that the fiscal cliff bill deals Democrats a losing hand, setting up an enormous March fight over federal spending, when government funding bills will have to pass, the sequester kicks in, and the debt limit has to be increased.

The White House and congressional lawmakers have reached a deal to avoid the “fiscal cliff” that would delay harsh spending cuts by two months, an Obama administration source said.

Democratic Senate Majority Leader Harry Reid and House of Representatives Minority Leader Nancy Pelosi have also reportedly signed off on the agreement, which would extend Bush-era tax cuts for family incomes below $450,000.

Yet the US was still technically on track to fall over the “fiscal cliff” at midnight on Monday.

Lawmakers were working feverishly into the night to hammer out a deal that would raise tax rates on the wealthy but preserve tax breaks for the middle class and maintain some key stimulus benefits like unemployment insurance.

The Senate plan was reportedly heavy on tax increases and light on spending cuts, which had raised concerns that it would repel rank-and-file lawmakers in the Republican-controlled House.

Under the Senate plan, those with a household income above $450,000 or individual income above $400,000 would be taxed at 39.6 percent, up from 35 percent.

Republicans, who control the House of Representatives, have been against raising taxes on the rich, while the Democrat-controlled Senate and the White House have been averse to spending cuts.

Meanwhile, the country’s chronic deficit spending - about $1tn a year - continues without a deal to address it.

Without a deal, the nation could lose up to 3.4 million jobs, the Congressional Budget Office has predicted. And budget cuts of up to 9 percent could hit most of the federal government.

And if the limit were not raised on how much the government can borrow, reaching the $16.4tn debt ceiling could lead to a first-ever default in February or March that would shake worldwide confidence in the United States.

On top of that, the current Congress is in session only through mid-day on January 3. After that, a freshly elected Congress with 13 new senators and 82 new House members will inherit the problem.

h/t: AJ English

WASHINGTON — The United States government will miss the end of the year deadline to resolve the so-called fiscal cliff, House Republicans conceded on Monday afternoon.

The House of Representatives will adjourn December 31 without voting on a bill to delay the impending tax hikes and spending cuts that will take start to take place tomorrow. Majority Whip Kevin McCarthy (R-California), the party’s whip, sent the following update to members on Monday afternoon.

Still, the inability of Congress to resolve this issue on time is the capstone to a session that was historically unproductive. The new Congress convenes on January 3rd. 

h/t: Huffington Post