Now that Congress has backed away from the fiscal cliff it faces three new deadlines and two more months of difficult debates.
The expectation is more of the familiar partisan battles in January and February over the debt ceiling, across-the-board spending cuts and a temporary budget to keep the federal government running.
The vote in Congress on the fiscal cliff, however, didn’t fall entirely along those same lines. It split the Triangle’s lawmakers 3-3, and brought surprises from both parties. Republican Howard Coble voted for the deal, a break from many in his party, because it preserved income tax cuts for most Americans and ensured that estates under $5 million wouldn’t be taxed.
“There was some compromise. And compromise in my opinion is not a dirty four-letter word,” Coble said on Wednesday. But he was guarded about the prospects for more of it. “Perhaps,” he said.
Meanwhile, liberal Democrat Brad Miller of Raleigh, who’s not returning for another term, voted against the legislation, warning that it set the stage for bargaining over spending cuts that would go too far.
“Congress has assured that there will be more embarrassing and damaging melodrama over the debt ceiling and spending in just a couple of months,” Miller said, referring to the March 1 deadline to make spending cuts or trigger automatic 8 percent cuts in the military, education and other programs, and the expectation of reaching the debt ceiling in mid-February.
“I have held my nose and voted ‘yes’ many times, but this bill makes mindless cuts to programs important to the middle class inevitable,” Miller said.
Rep. Mike McIntyre, a Democrat from Lumberton, voted against the fiscal cliff compromise as well – for different reasons. McIntyre said it added to the debt, delayed spending cuts and didn’t go far enough in tax reforms that help small businesses.
Those reasons were echoed to some extent by Rep. Renee Ellmers, R-Dunn.
“We must get serious about addressing the true driver of the fiscal mess that our nation is in,” Ellmers said in a statement Wednesday. “Our out-of-control spending does nothing to help American families and only exacerbates the problems facing our country. I look forward to working with my colleagues to address the real sources of this crisis and continuing the fight against government waste” in the upcoming congressional session.
But Democrat David Price of Chapel Hill and G.K. Butterfield of Wilson, who voted yes Tuesday, said it would be impossible to solve the deficit problem through spending cuts alone.
Price said the legislation preserved lower tax rates for the middle class, tuition tax credits for students and unemployment benefits, and postpones automatic, across-the-board cuts, what he called the “meat ax” approach.
In a statement Tuesday night he said he was hopeful that the vote meant “Republicans are newly committed to shared sacrifice in a broader, balanced deficit reduction agreement” and the new Congress should get to work on such an agreement right away.
But in an interview Wednesday he did not sound optimistic.
“Republicans seem likely to pursue the same kind of crisis-creation tactic they have before,” Price said. “What may restrain them is just how fed up people are with this. I certainly hear it. I hope they not only hear it but are going to do something about it.”
Republicans in the end agreed to raise revenue through higher taxes on the rich, but that gains only $600 billion – far from what’s needed to cut the deficit, Butterfield said.
Congress earlier this year voted to reduce federal spending by about $1 trillion for domestic programs and $500 billion for defense.
“Those are programs we depend on greatly in North Carolina. And now we’ve got to look at spending cuts again,” Butterfield said.
Butterfield said he hoped the House of Representatives would debate both spending cuts and adjustments to entitlement programs, such as Social Security and Medicare, at the same time.
Lawmakers may not be willing to vote on some hard calls on a stand-alone basis, but might do it if it’s part of a grand bargain that would solve the deficit problem, he said.
For example, Butterfield said, take raising the age limit on Medicare from 65 to 66.
“I’m vehemently opposed to it, but if it’s part of a huge, huge package, I could probably take a different approach,” he said.
Coble said he would have preferred an agreement with more spending cuts, but there wasn’t support to pass it. He said he was torn over his vote.
“My gut told me I wanted to vote no because I knew a lot of folks back home wanted me to vote no, but by the same token a lot of folks wanted me to vote for it.
“Making the tax cuts permanent was what decided it,” he said.
The plan preserves the Bush-era tax cuts for individuals making less than $400,000 ($450,000 for couples). The measure also ensures that 31 million Americans won’t be hit a bigger bill with the Alternative Minimum Tax.
It also exempted the first $5 million of an estate from taxes.
“That feature of the bill probably generated more calls and support than any other feature,” Coble said. “Family businesses could be wiped out if only $1 million was exempt.”
Both of the state’s senators voted for the legislation to avoid the fiscal cliff.
Republican Sen. Richard Burr said the deal was “far from perfect,” but it protected most Americans from increased taxes.
Democratic Sen. Kay Hagan also said the measure wasn’t ideal. “I would have preferred a comprehensive, balanced solution to avert the fiscal cliff and begin reducing the deficit,” she said.
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