Tuesday, January 01, 2013

Senate Passes Tax Hikes Remedy for Fiscal Cliff

Congress continues to chug along in trying to work out a solution to the nation's fiscal cliff melodrama. Three Democrats joined with five Republicans to vote 'no' on the compromise put forth by VP Biden and Senate Majority Leader McConnell. The vote occurred after midnight Monday night. Is this really any way to run a government? 

A deal to neutralize the fiscal cliff cruised through the Senate 89-8 in a late-night session and is headed for the House, whose session today begins at noon. The deal contains the first federal income tax hike in nearly 20 years, but the eight refuseniks weren't all Republicans, the Hill reports. Three Democrats joined five Republicans in rejecting the bill, including Iowa's Tom Harkin, who argued that the bill hammered out by Joe Biden and Mitch McConnell benefited the richest Americans at the expense of the poorest.
"Maybe now we are all believers of trickle-down economics. Not I," Harkin said. The other Democrats voting no were Tom Carper of Delaware and Michael Bennet of Colorado, while Chuck Grassley of Iowa, Mike Lee of Utah, Rand Paul of Kentucky, Marco Rubio of Florida, and Richard Shelby of Alabama said no from the GOP side.  
You can read the CBO scoring of the Senate bill HERE.

Essentially, the Senate passed a bill that was a tweaked version of Speaker Boehner's bill in the House.  That bill wasn't accepted by some on the Republican side because it raised taxes on the higher income earners, as a compromise with Democrats. There is also the fact that the House passed two bills over the summer months that would have prevented the last minute scramble drama if only Senate Majority Leader Reid had bothered to put either up for a vote.  The bills would have stopped tax increases and kept the process moving for achieving spending cuts afterwards.

Many Republicans and conservatives are fuming that the Senate bill received Republican votes.  This bill does provide the first action in twenty or so years that Republicans voted to raise taxes.

Senator John Cornyn (R-TX) issued the following statement after the Senate passed legislation to prevent a tax increase for 99% of all Texans and Americans: 

“I voted for this bill because it prevents a huge tax increase on 99% of all Texans and Americans. Nonetheless, I am dismayed at the lack of seriousness by the president on dealing with the core issues of our fiscal problems. Our spending is unsustainable and it is high time the president and his party engage in meaningful dialogue to get this county's spending under control.

Senator Lindsey Graham (R-SC) tweeted: "Last night, the Senate passed legislation, which prevents the expiration of the Bush-era tax cuts for 99 percent of Americans.

The dirty little secret is that your taxes are going up as of the beginning of 2013, no matter what Congress does. Now it is just a matter of how much.  The continued drip,drip of the implementation of Obamacare will drive the biggest of tax increases which will reach every American as the mandates kick in.  Wait until all those Obama voters who thought they were really sticking it to wealthier Americans by voting for Obama figure that truth out.  

The Senate bill is now moved to the House to vote on.  Early reaction is that there is little support for it in the House.  Some reports say that the House will make changes and send it back to the Senate.

Happy New Year.  

No comments: