Cliff Latest: GOP House Caves, Approves Senate Plan
In the end, their grumbles and plans to force the U.S. Senate to consider more significant spending cuts were reduced to a whimper. House Republicans, especially conservatives angered by any tax increase, caved late New Year's Day and voted to approve the Senate's compromised plan to avert the Fiscal Cliff.
Instead of raising taxes on everyone, the plan extended the Bush Tax Cuts on middle class Americans, while raising the top effective income tax rate from 35% to 39.6% on couples making more than $450,000. Singles making more than $400,000 will also pay the new rate.
Republican House Speaker John Boehner of Ohio approved the vote without comment, which will also mean a more modest tax increase for much of the U.S. labor force--77-million Americans hit by the end of a temporary cut in the Social Security payroll tax which was allowed to expire.
Late Tuesday, outspoken conservatives appeared ready to amend the Senate plan with additional spending cuts and a modified taxation structure, which would have forced reconciliation of the bill by an already recessed Senate that reconvenes Thursday with newly-elected members. Eric Cantor of Virginia, who voted against the final plan, urged Republicans to use a leveraging opportunity to lobby for more substantive fiscal changes.
Instead, those on the right promise tough fights on looming budget talks involving a two month postponement of mandatory sequestration spending cuts and a debt ceiling showdown over raising the nation's debt limit beyond $17.5-trillion.
Cliff agreement highlights:
--Keeps present tax rates for Americans making less than $400,000
--Raises top tax rate from 35 to 39.6%
--Extends estate tax exemption from $5-million for individuals and $10-million for couples
--Includes temporary extension of milk subsidies to prevent a doubling in milk prices
--Postpones mandatory "sequestration," spending cuts for two months