House Republicans backed down from their demands for more spending cuts and agreed to tax hikes last night, passing a Senate compromise bill that turned the nation away from the fiscal cliff’s threat of larger across-the-board tax increases and market turmoil.
But the measure only postponed draconian federal spending cuts for two months, and other financial logjams are still ahead, including a needed debt ceiling increase.
The bill was approved, 257-167, without an effort by Republicans to amend the bill after daylong contentious GOP caucuses.
The bill now goes to the president, who said he will sign it. Some experts said even with the deal becoming law, elements of the package still risk upsetting the economy.
“Thanks to a vote by Democrats and Republicans in Congress, I will sign a law raising taxes on the wealthiest 2 percent while providing a middle-class tax cut,” President Obama said after the vote. Without the measure, he said, the American economy might have been sent back into recession.
And the president warned Republicans about future financial battles. “There is a path forward if we focus not on our politics but on what is best for the country,” he said.
With stock and commodity markets set to open this morning, U.S. Rep James McGovern told the Herald he was worried that failure to enact the bill could have had dire consequences for the economy. But the turmoil and angst surrounding a last-minute deal will still likely send angry ripples through the markets, experts said.
“It’s a huge hit,” said Joel Naroff, president of Naroff Economic Advisors. “It hits people whether they’re making $10,000 or they’re making $2 million. … The lower your income, the more of your income you’re (spending). So if your taxes go up, it’s going to come out of your spending.”
The standoff added uncertainty that has discouraged consumers from spending and businesses from hiring and investing.
The decision to go ahead with a vote capped a day of intense political calculations for House Republicans who had to weigh their urge to cut spending against the possibility the Senate would refuse to consider any changes they made, potentially saddling House Republicans with the blame for a middle-class tax increase.
“We’ve gone as far as we can go,” said U.S. Rep. Jack Kingston (R-Ga.) “I think people are ready to bring this to a conclusion, and know we have a whole year ahead of us” for additional fights over spending.
Republicans met privately for nearly two hours yesterday and heard opposition from Majority Leader Eric Cantor (R-Va.), who has a strong following among conservatives.
“There was a lot of discontent in that room,” U.S. Rep. Steven LaTourette (R-Ohio) said after a GOP meeting.
“There’s a mini-revolt within the Republican caucus by conservatives in the Tea Party wing who don’t like this compromise,” McGovern said before the bill was passed.
Herald wire services contributed to this story.
But the measure only postponed draconian federal spending cuts for two months, and other financial logjams are still ahead, including a needed debt ceiling increase.
The bill was approved, 257-167, without an effort by Republicans to amend the bill after daylong contentious GOP caucuses.
The bill now goes to the president, who said he will sign it. Some experts said even with the deal becoming law, elements of the package still risk upsetting the economy.
“Thanks to a vote by Democrats and Republicans in Congress, I will sign a law raising taxes on the wealthiest 2 percent while providing a middle-class tax cut,” President Obama said after the vote. Without the measure, he said, the American economy might have been sent back into recession.
And the president warned Republicans about future financial battles. “There is a path forward if we focus not on our politics but on what is best for the country,” he said.
With stock and commodity markets set to open this morning, U.S. Rep James McGovern told the Herald he was worried that failure to enact the bill could have had dire consequences for the economy. But the turmoil and angst surrounding a last-minute deal will still likely send angry ripples through the markets, experts said.
“It’s a huge hit,” said Joel Naroff, president of Naroff Economic Advisors. “It hits people whether they’re making $10,000 or they’re making $2 million. … The lower your income, the more of your income you’re (spending). So if your taxes go up, it’s going to come out of your spending.”
The standoff added uncertainty that has discouraged consumers from spending and businesses from hiring and investing.
The decision to go ahead with a vote capped a day of intense political calculations for House Republicans who had to weigh their urge to cut spending against the possibility the Senate would refuse to consider any changes they made, potentially saddling House Republicans with the blame for a middle-class tax increase.
“We’ve gone as far as we can go,” said U.S. Rep. Jack Kingston (R-Ga.) “I think people are ready to bring this to a conclusion, and know we have a whole year ahead of us” for additional fights over spending.
Republicans met privately for nearly two hours yesterday and heard opposition from Majority Leader Eric Cantor (R-Va.), who has a strong following among conservatives.
“There was a lot of discontent in that room,” U.S. Rep. Steven LaTourette (R-Ohio) said after a GOP meeting.
“There’s a mini-revolt within the Republican caucus by conservatives in the Tea Party wing who don’t like this compromise,” McGovern said before the bill was passed.
Herald wire services contributed to this story.