WASHINGTON Past its own New Years deadline, a weary Congress sent President Barack Obama legislation to avoid a national fiscal cliff of middle-class tax increases and spending cuts late Tuesday night in the culmination of a struggle that strained Americas divided government to the limit.
The bills passage on a bipartisan 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.
Moments later, Obama strode into the White House briefing room and declared, Thanks to the votes of Republicans and Democrats in Congress I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing tax hikes that could have sent the economy back into recession.
He spoke with Vice President Joe Biden at his side, a recognition of the former senators role as the lead Democratic negotiator in final compromise talks with Senate Republican Leader Mitch McConnell of Kentucky.
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 campaigned for. 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.
The measure split the upper ranks of the Republican leadership in the House.
Speaker John Boehner of Ohio voted in favor, while Majority Leader Eric Cantor of Virginia and California Rep. Kevin McCarthy, the partys whip, opposed the bill.
Supporters of the bill in both parties expressed regret that it was narrowly drawn, and fell far short of a sweeping plan that combined tax changes and spending cuts to reduce federal deficits. That proved to be a step too far in the two months since Obama called congressional leaders to the White House for a postelection stab at compromise.
Majority Republicans did their best to minimize the bills tax increases, just as they abandoned their demand from earlier in the day to add spending cuts to the package.
By making Republican tax cuts permanent, we are one step closer to comprehensive tax reform that will help strengthen our economy and create more and higher paychecks for American workers, said Rep. Dave Camp of Michigan, chairman of the tax-writing House Ways and Means Committee.
He urged a vote for passage to get us one step closer to tax reform in 2013 as well as attempts to control spending.
House Democratic Leader Nancy Pelosi also said the legislation included permanent tax relief for the middle class, and she summoned lawmakers to provide bipartisan support as the Senate did.
The bill also would prevent an expiration of extended unemployment benefits for an estimated 2 million jobless, block a 27 percent cut in fees for doctors who treat Medicare patients, stop a $900 per month pay increase for lawmakers from taking effect in March and head off a threatened spike in milk prices.
It would stop $24 billion in across-the-board spending cuts set to take effect over the next two months, although only about half of that total would be offset with savings elsewhere in the budget.
The economic as well as political stakes were considerable.
Economists have warned that without action by Congress, the tax increases and spending cuts that technically took effect with the turn of the new year at midnight could send the economy into recession.
Even with enactment of the legislation, taxes are on the rise for millions.
A 2 percentage point temporary cut in the Social Security payroll tax, originally enacted two years ago to stimulate the economy, expired with the end of 2012. Neither Obama nor Republicans made a significant effort to extend it.
House Republicans spent much of the day struggling to escape a political corner they found themselves in.
I personally hate it, Rep. John Campbell of California, said of the measure, giving voice to the concern of many Republicans that it did little or nothing to cut spending.
The speaker the day after the election said we would give on taxes and we have. But we wanted spending cuts. This bill has spending increases. Are you kidding me? So we get tax increases and spending increases? Come on.
Cantor told reporters at one point, I do not support the bill. We are looking, though, for the best path forward.
Within hours, Republicans abandoned demands for changes and agreed to a simple yes-or-no vote on the Senate-passed bill.
They feared that otherwise the Senate would refuse to consider any alterations, sending the bill into limbo and saddling Republicans with the blame for a whopping middle-class tax increase. One Senate Democratic leadership aide said Majority Leader Harry Reid would absolutely not take up the bill if the House changed it.
The aide spoke on condition of anonymity, citing a requirement to keep internal deliberations private.