House Passes Senate's Fiscal Cliff Bill

House Passes Senate's Fiscal Cliff Bill

Despite deep reservations by some members of his Republican caucus, House Speaker John Boehner (R-OH) brought the Senate-passed bill to avert the fiscal cliff to the floor of the House for a vote tonight.   The House passed it (257-167).

Earlier in the day, some House Republicans said they wanted to amend the bill to add more spending cuts.  The Congressional Budget Office (CBO) calculated that the bill as passed by the Senate would add $4 trillion to the deficit over 10 years because of the extension of tax breaks, unemployment benefits and other provisions.  Boehner agreed to bring such an amendment to a vote, but only if 218 Republicans would promise to vote for it — the majority that would be needed to pass the amended bill absent any support from Democrats.   Other Republicans, realizing the need to settle the matter before financial markets reopen tomorrow, argued that though the bill was far from perfect, the issue of spending cuts could be dealt with later.

In the end, the latter group prevailed and no amendments were offered.  With the House vote in favor of the Senate-passed bill, that clears the measure for signature by President Obama, who has indicated that he will, indeed, sign it.

The bill, H.R. 8, settles a number of major tax issues, but from a space policy perspective the most important issue is the sequester — automatic spending cuts to defense and non-defense discretionary spending accounts that were to take effect tomorrow.  The bill delays the sequester for two months.  At that time, Washington will be debating raising the debt limit again. 

As some Members pointed out today, by resolving the current fiscal cliff drama in this manner, Congress has simply created three new “mini-cliffs” that will arise in coming months — raising the debt limit, resolving the sequester, and finalizing FY2013 appropriations (the government is currently operating under a Continuing Resolution that ends on March 27, 2013).

For this moment in time, however, significant tax increases for most taxpayers have been averted, while tax rates will increase for the wealthiest Americans, and the sequester has been delayed.  

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