WASHINGTON - The U.S. Senate early Tuesday morning easily approved a compromise bill to avert the so-called fiscal cliff. The bill passed by an unexpectedly large margin, 89-8. Both Louisiana senators, Democrat Mary Landrieu and Republican David Vitter, voted for the bill, which was drafted Tuesday morning following marathon negotiations between Vice President Joe Biden and Senate Republican Leader...
WASHINGTON - The U.S. Senate early Tuesday morning easily approved a compromise bill to avert the so-called fiscal cliff. The bill passed by an unexpectedly large margin, 89-8.
Sens. Mary Landrieu and David Vitter both voted for the fiscal cliff compromise legislation Tuesday morning. They were photographed at a Hurricane Katrina anniversary event.
Both Louisiana senators, Democrat Mary Landrieu and Republican David Vitter, voted for the bill, which was drafted Tuesday morning following marathon negotiations between Vice President Joe Biden and Senate Republican Leader Mitch McConnell.
The huge margin may be a positive sign that the House, despite concerns from some Republicans that the deal relies too much on tax increases and by liberal Democrats that it exempts too many from paying higher taxes, might pass the House.
The House vote will come after the midnight Jan. 1 deadline for the fiscal cliff, a combination of tax increases and spending cuts that Congress agreed to implement if it could not a reach an accord on alternative ways to reduce the federal deficit. But if the House does approve the bill later Tuesday, or perhaps on Wednesday, it will be soon enough so most Americans won't see extra taxes taken out of their next pay checks.
The bill averts big increases in income tax rates for more than 98 percent of all Americans, continues extended unemployment benefits and extends more generous earned income tax credits for low-income Americans, as well as credits to help offset college tuition costs. The bill increase taxes for families with incomes over $450,000 - increasing the top rate from the current 35 percent to the 39.6 percent in effect during the Clinton administration.
The legislation doesn't continue a 2 percent payroll tax reduction for Social Security, first enacted in 2010. This means the average taxpayer can expect to pay about $1,000 more in payroll taxes in 2013.
The compromise bill cancels scheduled budget cuts in defense and domestic programs for two months, with the cost of doing so offset by a combination of unspecified new tax revenues and other spending cuts.
Sen. Landrieu issued the following statement after voting for the compromise bill:
"The compromise we reached tonight shows that we can work together and reach an agreement that protects the middle class by keeping tax rates from rising at a time when many can least afford it. I urge our colleagues in the House to act quickly on this commonsense proposal."
"This legislation will protect more than 98 percent of Louisianans from an income tax increase, preserve key tax credits for 576,000 Louisiana families with children and 158,000 families to help pay for higher education, and maintain the Earned Income Tax Credit. In addition, we worked hard to extend the estate tax in a reasonable way that protects small businesses and farmers."
"While this compromise did not do as much as we had hoped to reduce the deficit, I remain committed to working with my colleagues on both sides of the aisle to find a balanced approach to deficit reduction that includes both spending cuts and new revenues."
Vitter issued the following comment:
"This is a much better tax outcome under Obama than I would have guessed," Vitter said. "It preserves the Bush tax cuts for 99 percent of Americans, with good policy on the death tax, dividends and capital gains, so important to small business. Just as importantly, it makes it all permanent, which we could never do before. But of course we still must pass real and dramatic spending reform. For me, that's a non-negotiable requirement of all budget or debt limit bills, due around March 1."
Rep. Steve Scalise, R-Jefferson, said Monday night that the he and other House members are still trying to figure out exactly what is in the debt ceiling compromise. But he said he's disturbed that the White House won some additional spending, including a continuation of extended unemployment benefits.
He said that House Republicans are intent on cutting spending, and will use a needed increase in the debt ceiling in the next few months to press for more cuts.
Scalise said without more information he can't say how he'll vote on the fiscal cliff legislation.
Rep. Cedric Richmond, D-New Orleans, said he's relieved that Senate Republicans dropped a proposal to tie any fiscal cliff agreement to lowering costs for Social Security. Those discussions, he said, should occur, but not in connection to the fiscal cliff discussions.
"That was my biggest concern," Richmond said.
"Talking about benefits for seniors and the debt don't go together because Social Security hasn't contributed to the debt. They are separate."
Still, Richmond said, he hopes the compromise is something he can support. The higher income levels are raised for continued eligibility for the Bush-era tax cuts, Richmond said, the more spending has to be reduced and he doesn't want a disproportionate impact from new cuts to hit the middle class and low-income Americans.
For Rep. Jeff Landry, R-New Iberia, who lost his run-off race Dec. 6 to fellow GOP incumbent Charles Boustany, R-Lafayette, the fiscal cliff bill will likely be the last he votes on as a member of the House.
"Number one for me is that I can't vote for tax increases unless there are meaningful cuts in spending," said Landry, who won his first time with support from the anti-tax Tea Party movement.
Landry said that he is "concerned" about the higher taxes that will result for all Americans if no agreement is reached.
But he said the "even bigger threat" would be for Congress not to seriously deal with the deficit, which he contends ultimately can cause an even bigger hit on the U.S. economy.