Cliff deal teetering on the brink as House Republicans balk

Lack of spending cuts could doom Senate bill; 'time to get serious'

Jan 1, 2013 @ 5:56 pm

By Mark Schoeff Jr.

Boehner, fiscal cliff
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A measure overwhelmingly approved by the Senate in the early morning hours of New Year's Day to avert the so-called fiscal cliff has hit turbulence in the House and will possibly be blown off course and back to the Senate.

Many House Republicans are resisting the legislation, which would allow Bush administration tax cuts to expire for households earning more than $450,000 and make other permanent changes to the tax code. As of today, approximately $600 billion in automatic tax increases and spending cuts go into effect unless Congress acts.

The sticking point for Republicans is a lack of spending cuts in the Senate bill. The measure, which raises taxes by about $600 billion and costs $330 billion, delays for two months about $110 billion in 2013 spending cuts known as sequestration.

In a two-hour meeting of the House GOP caucus earlier today, many members criticized the Senate bill, which was brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell, R-Ky. House Majority Leader Eric Cantor, R-Va., opposes the bill.

“The lack of spending cuts in the Senate bill was a universal concern amongst members in today's meeting,” Rory Cooper, Mr. Cantor's spokesman, said in a statement. “Conversations with members will continue throughout the afternoon on the path forward.”

The House GOP caucus convened for another meeting at 5:15 p.m. on Tuesday. It's uncertain whether there will be votes on Tuesday or how many.

Earlier in the day, House Democratic leaders emerged from a meeting with Mr. Biden to urge House Speaker John Boehner, R-Ohio, to allow a vote soon on the Senate bill.

It's not clear how much support there is in the House for the legislation. But if Mr. Boehner allows a vote in which the bill passes with more Democrats than Republicans, he could endanger his speakership.

Republican were discussing amending the Senate bill and sending it back to that chamber for further work.

“It is our turn now to respond and put another proposal up because we're not going to accept this one as is,” said Rep. Marlin Stutzman, R-Ind., a member of the House Financial Services Committee. “We'll put our principles and priorities in the next offer.”

Rep. Spencer Bachus, R-Ala., foresees a similar process.

“I would be shocked if this bill doesn't go back to the Senate,” Mr. Bachus told reporters after the first GOP meeting on Tuesday.

There are a couple problems with trying to ping-pong a bill back and forth between the House and Senate. First, Senate Majority Leader Harry Reid, D-Nev., said after the fiscal-cliff vote that that chamber would not schedule any more votes until Thursday.

More importantly, the current session of Congress ends at noon on Thursday. If the House and Senate do not approve an identical fiscal cliff bill by then and send it to President Barack Obama to be signed into law, the bill will die. The whole process will have to start over in the new Congress.

In the meantime, financial markets may react negatively to the political stalemate in Washington.

Seemingly in anticipation of House resistance, Mr. McConnell acknowledged that the Senate bill only addresses the tax portion of the fiscal cliff. But he promised that the burgeoning federal deficit would be tackled next.

“Each of us could spend the rest of the week discussing what a perfect solution would have looked like, but the end result would have been the largest tax increase in American history,” Mr. McConnell said just before the Senate approved its fiscal cliff measure early Tuesday morning. “Now it's time to get serious about reducing Washington's out-of-control spending. That's a debate the American people want. It's the debate we'll have next. And it's a debate Republicans are ready for.”

But Mr. Stutzman wants to fight the deficit battle now.

“If we don't get spending cuts, I'm not interested in talking about letting taxes go up,” Mr. Stutzman said.

Mr. Boehner has to determine how many of his GOP colleagues agree with Mr. Stutzman and whether he has enough votes to pass the Senate bill.

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