A confident White House may have an indirect influence on the House consideration of the Senate-approved fiscal deal. NBC's Kristen Welker reports.
By M. Alex Johnson, Frank Thorp and Luke Russert, NBC News
House members were meeting Tuesday to decide whether they would go along with the Senate's approval of a last-minute deal to pull the U.S. back from the so-called fiscal cliff.
Senators passed a bipartisan agreement in the middle of the night that would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000. It would also block spending cuts for two months, extend jobless benefits for the long-term unemployed, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.
Vice President Joe Biden, who brokered the deal with Senate Republican leader Mitch McConnell of Kentucky, lobbied House Democrats to get behind the arrangement at a noon meeting.?
House Speaker John Boehner was scheduled to brief House Republicans. A Republican leadership aide told NBC News that members were to discuss potential options, with no decisions expected before another meeting later in the day.?
But Rep. Tom Cole, R-Okla., a member of the Budget Committee and the Republican leadership in the current Congress, told NBC News he thought the House should take a vote Tuesday and that he planned to vote in favor.
The high-stakes drama was resolved after days of back and forth between Biden and McConnell, who finally came to an agreement late Monday.
The measure was then taken to the Senate floor, where it passed by an overwhelming majority of 89-8. Senators who voted against it included Republicans Marco Rubio of Florida, Rand Paul of Kentucky and Richard Shelby of Alabama.
NBC's Luke Russert explains why House Speaker John Boehner's meeting with House Republicans is critical to the Senate-approved fiscal deal.
President Barack Obama acknowledged the difficulties the parties had coming to an agreement and pushed the House to quickly approve the bill in a statement just after the vote.
"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," the statement said. "This agreement will also grow the economy and shrink our deficits in a balanced way ? by investing in our middle class, and by asking the wealthy to pay a little more."
Squabbling far from over
Despite the relief in Washington over this first step, Boehner and other Republican congressional leaders refused to endorse the agreement.
"The House will honor its commitment to consider the Senate agreement if it is passed," Boehner and the other leaders said in a statement Monday. "Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members ?and the American people ? have been able to review the legislation."
In addition to the battle the legislation faces in the House, there are several other difficult issues that political leaders will be forced to revisit over the coming weeks and months, including cuts to defense and other domestic programs, as well as the debt ceiling, the subject of a mammoth congressional brouhaha last year.
The imposed delay would allow the White House and lawmakers time to regroup before plunging very quickly into a new round of budget brinkmanship, certain to revolve around Republican calls to rein in the cost of Medicare and other government benefit programs.
In a frantic rush of negotiations on New Year's Eve, the Senate voted for a compromise that would increase tax rates on those making above $400,000 a year. NBC's Kelly O'Donnell reports and NBC political director Chuck Todd offers analysis.
Devil in the details
The measure is the first significant bipartisan tax increase since 1990, when former President George H.W. Bush violated his "read my lips" promise on taxes. It would raise an additional $620 billion over the coming decade when compared with revenues after tax cuts passed in 2001 and 2003, during the administration of Bush's son, George W. Bush. But because those policies expired at midnight Monday, the measure is officially scored as a whopping $3.9 trillion tax cut over the next decade.
The sweeping Senate vote exceeded expectations ? tea party conservatives like Pat Toomey, R-Pa., and Ron Johnson, R-Wis., backed the measure ? and would appear to grease enactment of the measure despite lingering questions in the House, where conservative forces sank a recent bid by Boehner to permit tax rates on incomes exceeding $1 million to go back to Clinton-era levels.
Under the Senate deal, taxes would remain steady for the middle class but rise at incomes over $400,000 for individuals and $450,000 for couples ? levels higher than Obama had campaigned for in his successful drive for a second term in office. Some liberal Democrats were disappointed that the White House did not stick to a harder line, while other Democrats sided with Republicans to force the White House to partly retreat on increases in taxes on multimillion-dollar estates.
Officials also decided at the last minute to use the measure to prevent a $900 pay raise for lawmakers due to take effect this spring.
Vice President Joe Biden reached a deal with Senate Republican leader Mitch McConnell, pictured, to avoid the massive tax hikes and spending cuts set to begin Tuesday. NBC's Kelly O'Donnell reports.
Not everyone's happy
Even by the dysfunctional standards of government-by-gridlock, the activity at both ends of historic Pennsylvania Avenue was remarkable as the administration and lawmakers spent the final hours of 2012 haggling over long-festering differences.
Republicans said McConnell and Biden had struck an agreement Sunday night but that Democrats pulled back Monday morning. Democrats like Tom Harkin of Iowa said the agreement was too generous to upper-bracket earners. Obama's longstanding position was to push the top tax rate on family income exceeding $250,000 from 35 percent to 39 percent.
"No deal is better than a bad deal. And this look like a very bad deal," said Harkin.
The measure would raise the top tax rate on large estates to 40 percent, with a $5 million exemption on estates inherited from individuals and a $10 million exemption on family estates. At the insistence of Republicans and some Democrats, the exemption levels would be indexed for inflation.
Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.
The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.
Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.
Despite bitter battling over taxes in the campaign, even diehard conservatives endorsed the measure, arguing that the alternative was to raise taxes on virtually every earner.
"I reluctantly supported it because it sets in stone lower tax rates for roughly 99 percent of American taxpayers," said Sen. Orrin Hatch, R-Utah. "With millions of Americans watching Washington with anger, frustration and anxiety that their taxes will skyrocket, this is the best course of action we can take to protect as many people as possible from massive tax hikes."
The Associated Press contributed to this report.
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