About two hours after midnight on New Years Day, the Senate passed a deal to avert the coming “fiscal cliff.” The next evening, the House passed the same bill, putting it on the president’s desk. While the bill passed with only 8 nay votes in the Senate, the House vote was much more strongly split along party lines. The resolution has been controversial, and will likely be the first of many such conflicts in the months and years to come.
Many conservatives were upset after the deal passed at the tax increases and lack of spending cuts in the legislation. The Congressional Budget Office concluded there would be $41 in tax increases for every dollar of spending cuts under the plan, which will raise taxes on 77% of Americans, by estimates of the Tax Policy Center. The problem is that the default situation as of January 1 was an even greater tax increase with different spending cuts, but a similar amount. Should the tax increase be measured from December 31 or January 1? The different approaches yield highly different analyses.
The Senate bill passed almost unanimously, with only eight dissenting votes, three Democrat and five Republican. Both Senators Marco Rubio and Rand Paul, who are likely Republican presidential candidates, voted against the bill. Rubio emphasized the negative impact that increased taxes would have on businesses and their employees. Democrat Senator Michael Bennet became the only Coloradan politician whose vote did not fall along party lines when he also voted against the bill, saying that a long term deficit reduction solution was needed, though not elaborating on what policies he wants to see as part of such a plan.
In the House, 151 Republicans voted against the bill, while 85, including Paul Ryan, voted for it. 16 Democrats opposed it, while 172 supported it. Democrats Diana DeGette, Ed Perlmutter and Jared Polis all voted for the bill, while Cory Gardner, Doug Lamborn, Mike Coffmann and Scott Tipton voted against it. Gardner said it was “a disappointing attempt to address a crisis everyone knew was coming a year ago,” and that it ignores crucial issue and lacks deficit reduction.
The deal which passed prevents the full impact of the tax hikes while changing the distribution of spending cuts. Some chose to take the practical path, and others chose to stick by their ideology. Some people argue that this was a less-bad outcome to the “cliff,” while others say the passage of a deal unfavorable to Republicans shows weakness.
The White House has taken the opportunity to paint the Republicans, who just a week ago were being framed as unreasonable, as being weak on taxes, stressing the "permanence" of the hikes and going so far as to say that agreeing to the deal breaks the Norquist tax pledge, and that this "breaks the threshold" and means they will be more flexible on taxes in the future. The complexity of this situation and certainty of even higher rates in the absence of a deal, however weak, means that no precedent was set, but Republicans must be firm in their convictions to dispel such ideas.