• Fiscal cliff deal: House OKs proposal despite GOP objections

    President Obama praised lawmakers and Vice President Joe Biden after the House of Representatives voted to pass a Senate measure to avert the most serious impacts of the so-called fiscal cliff.

    Updated at 12:32 a.m. ET: An agreement to stave off the harshest and most immediate consequences of the fiscal cliff won approval in the House late Tuesday. President Barack Obama signed the law on Wednesday night, the battle over which foreshadowed more fights with Congress over spending.

    Following a day of hectic wrangling on Capitol Hill — where the prospects for passing the bipartisan, Senate legislation regarding the fiscal cliff hung in the balance for much of New Year's Day — the House voted 257 to 167 to pass the belated compromise measure over the objections of many conservative Republicans.

    The legislation takes steps toward resolving the combination of automatic tax hikes and spending cuts that took effect at midnight on Jan. 1. It preserves tax rates as they were at the end of 2012, except for those individuals earning more than $400,000 and households earning over $450,000. It also allows taxes on capital gains and dividends to go up, and extends benefits of the unemployed. Additionally, the Senate bill delays the onset of the "sequester" — the swift, automatic spending cuts — for two months. 

    Fiscal cliff compromise leaves few satisfied

     

    "Thanks to the votes of Democrats and Republicans in Congress I will sign a law that raises the taxes on the wealthiest of Americans," Obama said in remarks at the White House Tuesday, "while preventing a middle-class tax hike."

    The House vote laid bare some of the internal ideological divisions to plague the GOP over the past two years. More Republican congressmen (151) voted against the Senate bill than for it (85), meaning that Democrats' support was needed to advance the final deal. House Speaker John Boehner, R-Ohio, took the rare step of casting a vote, and did so in favor of the legislation. Rep. Paul Ryan, R-Wis., the former Republican vice presidential nominee, also supported the package. But Boehner's top two lieutenants, Majority Leader Eric Cantor, R-Va., and Majority Whip Kevin McCarthy, R-Calif., each opposed the deal.

    The House voted Monday to approve the Senate's fiscal cliff bill by a vote of 257-167. Richard Lui, Luke Russert and Mike Viqueira report on MSNBC.

    "Now the focus turns to spending," Boehner said in a statement following the House vote. "The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt."

    While the last-minute action on Capitol Hill essentially mitigates much of the risk posed to the U.S. economic recovery by the fiscal cliff, it hardly brings resolution to the bitter and often intractable fight in Washington over taxes and spending. The first half of 2013 will feature battles in Congress over raising the debt limit, continuing basic government funding and the expiration of this two-month delay in the sequester. 

    Bipartisan outrage after House skips vote on $60 billion Sandy aid bill

    Obama nodded to those looming fights in his remarks Tuesday evening, renewing his call for "balance" in any solution in the coming year to address deficits and debts. But the president also sternly warned Congress against using the debt ceiling as a bargaining chip, as Republicans had in summer of 2011.

    "While I'll negotiate over many things, I will not have another debate with this Congress over whether to pay the bills they have racked up," Obama said.

    PhotoBlog: Deal done, Obama heads back to Hawaii with a weary wink

    The fiscal cliff itself was the product of discord in Congress resolving those very issues. And the difficulty in attaining even this less ambitious piece of legislation — versus the kind of "grand bargain" Obama had first sought in talks with Republicans — offered a cautionary tale for the 113th Congress, in which the House and the Senate remain controlled by the same parties as during the past two years. 

    Squabbling
    And even for much of Tuesday, House approval of the fiscal legislation — which was negotiated by Senate Minority Leader Mitch McConnell, R-Ky., and Vice President Joe Biden — was far from certain. GOP leaders were forced to cajole conservatives who complained the fallback deal contained insufficient spending cuts. Only after it became clear that Republicans wouldn't have the votes to amend the Senate proposal — which the upper chamber said it wouldn't even consider — did House Speaker John Boehner, R-Ohio, bring the bill to the floor. 

    The squabbling was familiar to any observers of Congress during the past two years. This divide almost resulted in a government shutdown and a default on the national debt in 2011. It again threatened Tuesday to allow the painful, across-the-board tax hikes and spending cuts to play out just as the U.S. economic recovery showed signs of accelerating.

    PhotoBlog: See images of Congress working overtime to avoid fiscal cliff

    And this deal just approved by Congress in the waning hours of 2013's first day all but ensures that much of the coming year will be dominated by similar battles in Washington. Republicans are hopeful they might be able to extract more spending cuts and entitlement reforms with the government up against other deadlines, like the one needed this spring to authorize more government borrowing. 

    That could complicate Obama's already-ambitious second term agenda. The president said just this past Sunday on NBC's "Meet the Press" that he will seek comprehensive immigration reform legislation and new laws to address gun violence.

     

     

  • In emails to supporters, White House highlights fiscal cliff deal

    Hours after Congress passed a deal to avert the fiscal cliff, the White House is continued its “outside game” of encouraging public support of President Obama’s policies – in this case, highlighting what the White House considers a victory in the fight over raising tax rates on the wealthiest Americans.

    Campaign manager Jim Messina sent a mass email via BarackObama.com, the former campaign website, linking to the video in which President Obama touts the deal and urges supporters to stay involved during his second term.

    “Just like four years ago, winning an election won’t bring about the change we seek on its own. It only gives us the chance to make that change,” he says in the three-minute video.

    And subscribers to WhiteHouse.gov, the official website, got an email from senior adviser David Plouffe explaining “7 things you need to know about the tax deal.”

    One big thing highlighted in that second email: that Obama kept his promises; the first two facts, about tax rates, start off that way.

    “As the President promised, income taxes for middle-class families will stay low permanently,” says Fact #1.

    Since the election, White House has put an emphasis on outreach over its key legislative priorities, after criticism during Obama’s first term that he didn’t do enough to keep the public informed.

    The fiscal cliff outside game has included a social media offensive as well as events in Pennsylvania and Michigan that mimicked the president’s re-election rallies.  

  • Big policy losers in tax deal: deficit reduction and 'certainty'

    Congress has avoided going over the so-called fiscal cliff for now -- but the solution comes at a cost of nearly $4 trillion in foregone revenue over the next 10 years.

    NBC's Domenico Montanaro reports that while some are reading into the House Speaker John Boehner-Majority Leader Eric Cantor vote split, there isn't likely a Machiavellian undermining of Boehner at play by Cantor.

    In Tuesday’s climactic late-night vote, the overwhelming House majority made some clear policy choices: against income tax increases for most people, against fundamental changes in the major drivers of federal spending (entitlement programs), and against cuts – at least immediate cuts – in non-entitlement spending.

    So what policies and interests were the winners and losers? Here’s an assessment:

    Loser: The power of “leverage.” Since they took over the House in the 2010 election, Republicans haven’t figured out a way to use their political clout to persuade or nudge Obama into what they say they most want: changes in entitlement programs and therefore a slower increase in spending. Confrontation tactics and threats to not raise the federal borrowing limit led to the Budget Control Act of 2011, but then some Republicans, joined by almost all Democrats, voted Tuesday to not allow that law to start biting.

    Conversely, even with his re-election on a platform of raising taxes on single earners over $200,000 and married couples with incomes over $250,000, Obama was unable to use his leverage to get what he really wanted and ended up settling for a partial victory.

    Tuesday’s final vote that had just 85 Republicans in support, including House Speaker John Boehner but not some of his top lieutenants, also unveiled something of a split within the party that could hamper GOP success in negotiations in the next few months on the debt ceiling.

    Rep. Chris Van Hollen, D-Md., joins Morning Joe to discuss the last-minute agreement reached by the House on New Year's Day. The New Yorker's John Cassidy also joins the conversation.

    Loser: Deficit reduction. If deficit reduction is what voters want, the bill passed by the House and Senate will disappoint them.

    It will cause a loss of nearly $4 trillion in tax revenues over 10 years – compared to the projected revenues if Congress had simply done nothing and allowed the law on the books in 2012 to expire.

    That $4 trillion will need to be found somewhere if Congress wants to reduce budget deficits in future years and hold down the debt-to-national income ratio.

    Erskine Bowles and Alan Simpson, the heads of President Barack Obama’s commission on fiscal policy and now the heads of the Campaign to Fix the Debt, said after the House vote that “Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs…. Yet even after taking the country to the brink of economic disaster, Washington still could not forge a common-sense bipartisan consensus on a plan that stabilizes the debt.”

    Winner: The Washington, D.C. culture of tax breaks for special interests.

    Despite much rhetoric from Obama, Boehner, Bowles and Simpson, and others about abolishing tax preferences and simplifying the tax code, the bill passed by the House and Senate preserves and extends 60 specific credits, preferences and other benefits for targeted groups and industries.

    In one sense, this is a tribute to the interests and lobbyists who have worked diligently to advocate for these provisions; in another sense it reflects the desire of members of Congress to use their power to shape the tax code for the benefit of favored groups.

    Some of the tax breaks are minuscule in budget terms: a one-year extension of an economic development tax credit for American Samoa will cost only $62 million in lost revenue, according to the official scorekeepers for tax legislation, the staff of the Joint Committee on Taxation.

    President Obama will sign the "fiscal cliff" legislation approved by a divided House of Representatives, preventing middle class tax hikes and huge spending cuts that many feared could have pushed the economy into a new recession. NBC's Kelly O'Donnell reports.

    But some of the provisions are especially significant for particular industries: a two-year extension of tax credits for blenders of biodiesel and renewable diesel is worth $2 billion.

    Anne Steckel, vice president of federal affairs at the National Biodiesel Board, said, “Because of this decision, we'll begin to see real economic impacts with companies expanding production and hiring new employees."

    A study conducted for the National Biodiesel Board by economics consulting firm Cardno ENTRIX found that the biodiesel industry would support more than 112,000 jobs with the tax credit in place compared to 82,000 without it.

    Due to another provision of the bill, taxpayers in states with sales taxes get a one-year extension of their ability to deduct their state tax payments on their federal tax return. That’s worth more than $5 billion to them – and a loss of the same amount to the Treasury. This is especially valuable to people in states with no state income tax, such as Nevada and Florida, where much of the state revenue comes from relatively high state sales taxes.

    NBC's Domenico Montanaro reviews the fiscal cliff deal and analyzes what it means for the future.

    As bargaining between Obama and GOP congressional leaders plodded on into December, it seemed that there was never any real likelihood that the year-ending legislation was the moment for fundamental tax reform. That fundamental reform is supposed to come later this year, according to the chairmen of the House and Senate tax-writing committees. But the ability of special tax preferences to survive year after year indicates that old tax-favoritism habits will die hard, even if Congress embarks on tax reform.

    Loser: “Certainty.” A favorite theme of members of Congress on both sides of the aisle was the need to end the uncertainty over fiscal policy so that business owners and investors could make decisions about hiring and deploying their capital.

    Both Obama and House Ways and Means Committee Chairman Dave Camp, R-Mich. used the word “permanent” to describe the income tax provisions in the bill.

    Obama said on New Year’s Eve that Republicans vowed they “would never agree to raise tax rates on the wealthiest Americans.” But he said the bill “would raise those rates and raise them permanently.”

    And Camp said after Tuesday’s vote that “We have acted to make those (2001 and 2003) tax cuts permanent – protecting middle-class Americans from the higher tax rates that were in place when President Bill Clinton occupied the White House.”

    Former Rep. Jim McCrery, a tax lobbyist with Capitol Counsel in Washington and former Republican member of the House Ways and Means Committee, said “’permanent’ simply means that there’s no sunset provision… It does not mean by any stretch of the imagination that those provisions will be in the tax code forever. In fact, most people anticipate a very aggressive effort to reform the tax code in an overarching way” in the new Congress that convenes Thursday.

    History argues against anything being permanent in the tax code. The top personal income tax rate has changed seven times in the past 30 years and other tax provisions have changed even more frequently.

    Winners: Taxpayers earning less than $250,000, and joint filers earning less than $300,000.

    Most workers won’t be paying higher income taxes. For workers in the $50,000 to $75,000 range, the bill represents roughly a $1,500 income tax cut – compared to what their tax liability would have been if Congress had allowed Clinton-era tax policies to return as they were scheduled to do on Jan. 1.

    While tax rates will not go up for most, people making more than $250,000 will face a reduction in the amount they can deduct and in the value of their personal exemption. And those above $400,000 income face higher income tax rates, with the top marginal rate increasing from 35 percent to 39.6 percent.

    And upper-income investors are already facing an increase in the tax on capital gains enacted in the Affordable Care Act. The top capital gains tax rate will go from 15 percent to 23.8 percent.

    But overall, 92 percent of the tax increase will fall on tax filers with incomes over $1 million, according to the nonpartisan Tax Policy Center. Contrary to rhetoric from some members of Congress, it’s not only the middle class who are being shielded from paying more for their government – it’s upper-income people as well. (Median annual U.S. household income is about $51,000.)

    Winner: Traditional Social Security funding. There was bipartisan agreement to restore the 6.2 percent payroll tax which – in a bid to stimulate the economy – had been cut to 4.2 percent in 2011.

    Going back to a 6.2 percent rate reverts to longstanding policy of having a dedicated source of tax funding for Social Security. For a worker making $60,000 a year, this decision will mean $23 a week or $1,200 a year in higher taxes. But it also means Social Security will not be borrowing general tax revenues to make up its shortfall as it had been doing in 2011 and 2012.

    The original version of this story incorrectly said the extension of the biodiesel tax credit is for one year. It is extended for two years.

     

     

  • House to vote on Sandy funding Friday, placating outraged lawmakers

    Updated 11:15 p.m. ET: House Speaker John Boehner is giving some ground on Sandy funding and timing a vote.

    The House will now hold a vote Friday on $9 billion in Sandy recovery funds, followed by another vote on $51 billion on Jan. 15th.

    Congress did not hold a vote last night, enraging Tri-state-area members of Congress from both parties.

    After a blitzing round of cable interviews, in which Republican Rep. Peter King (NY) blasted Boehner for not voting on the funding last night, he and other New York- and New Jersey-area members say their concerns have been addressed.

    "Turning your back on people who are starving and freezing is not a Republican value," King had said this morning on CNN.

    This afternoon, after a meeting with Boehner, King's tone changed.

    "Whatever's done is done, and that's it," King said at an afternoon press conference on Capitol Hill, adding later, "The bottom line is we need the $60 billion." King later said he was satisfied with the response from House GOP leaders.

    Boehner and Reps. Michael Grimm (NJ) and Chris Smith (NJ) also now say they will all support Boehner when he comes up for reelection for speaker tomorrow.

    The move also came after New Jersey Gov. Chris Christie slammed Boehner and House Republicans earlier in the day.

    "Shame on you. Shame on Congress," Christie said in a televised news conference from Trenton, N.J. He called Congress' delay "disgraceful."

    "It is why the American people hate Congress," Christie said, adding, "Unlike people in Congress, we have actual responsibilities."

  • Boehner likely to be reelected speaker, but there could be drama

    The House will vote tomorrow to elect a Speaker of the House. While it is likely that Rep. John Boehner (R-OH) will be reelected, if 17 conservatives decide to vote against Boehner, it could lead to the first second ballot for speaker since 1923.

    There are no indications Boehner will not be re-elected Speaker. While there will likely be members who vote against him, there is no real candidate that could garner enough votes to take Boehner down.

    Chip Somodevilla / Getty Images

    House Speaker John Boehner (R-OH) leaves a House Republican Caucus meeting.

    The 113th Congress will convene for the first time at noon Thursday, after which the House will vote to elect a speaker.

    Members will be called by name alphabetically and asked for their vote. This vote is different than typical votes, which are done electronically during a set period of time. 

    The next speaker needs a majority of all votes cast to be elected. They do not need a majority of the full membership of the House. The 113th has 434 members because Rep. Jesse Jackson Jr.'s seat will be vacant.  

    If all members were to vote, Boehner would need 218 votes, unless there are members who are absent for the vote or members who vote "present" (for no one).

    Since 1913, the year the House reached the size of 435 members, there has only been one time that no candidate received the majority of the votes cast for speaker.  

    That was in 1923, when nine ballots over three days were needed before Rep. Frederick Gillett (R-MA) was reelected to the position for a third term.

    The speaker does not have to be a member of Congress, but in the history of the House of Representatives there has never been a speaker who was not a member.

    Rep. Louie Gohmert (R-TX) nominated Newt Gingrich this year during the Republican Conference meeting, but that nomination was not seconded, and Speaker Boehner was nominated by a voice vote (no objectors) to be the Republicans' nominee yet again.  Democrats chose to have Nancy Pelosi as their nominee for Speaker of the House.

    Between 1943 and 1995, only the nominated Republican and Democrat received votes, but before that, it was customary for members of other groups within parties would garner votes as well. 

    Since 1913, the speaker has been elected without a majority of the whole House, but with the majority of those voting, only four times: 

    -- 1917 (65th Congress) -- "Champ" Clark (D-MO) was elected with 217 votes; 
    -- 1923 (68th Congress) -- Frederick Gillett (R-MA) was elected with 215 votes;
    -- 1943 (78th Congress) -- Sam Rayburn (D-TX) was elected with 217 votes;
    -- 1997 (105th Congress) -- Newt Gingrich (R-GA) was elected with 216 votes

    Recent speaker votes:

    -- 2011 (Jan. 5th): Boehner 241, Pelosi 173, Shuler 11, Lewis (GA) 2 Costa 1, Cardoza 1, Cooper 1, Kaptur 1, Hoyer 1, Present 1 
    -- 2009 (Jan. 6th): Pelosi 255, Boehner 174
    -- 2007 (Jan. 4th): Pelosi 233, Boehner 202
    -- 2005 (Jan. 4th): Hastert 226, Pelosi 199, Murtha 1, Present 1 

     

  • Boehner's not in jeopardy; Cantor's playing the long game; 'Debacle' for GOP

    Boehner not at risk of losing speakership - Cantor playing the long game .... All this sets up an even bigger fight - triple jeopardy in just a couple months ... the "debacle" for the Republican Party ... a tax hike or tax cut? ... Simpson-Bowles see "missed opportunity" ... You want him to do what to himself? ... Bill goes to Hawaii ... Outrage over Sandy funding ... and what about guns?

    ANALYSIS: Some are making a lot of the vote split between House Speaker John Boehner and Majority Leader Eric Cantor. But the reality is less Machiavellian politics and more long-term maneuvering.

    What it showed more than anything isn’t some deep rift within the conference or that Boehner’s speakership is in jeopardy. It isn’t a coup against Boehner. It shows that Boehner sees the light at the end of the tunnel of his career and would prefer to be more of a pragmatist and deal maker – but his conference won’t allow him to be that. That pragmatic streak is in the minority of the House GOP.

    Cantor and Majority Whip Kevin McCarthy, on the other hand, are going to be around for a while, and if they want to be leaders of the conference in the House, perhaps even speaker, and want to have any political clout, they have to stand with the influential conservative base.

    Cantor has stood with Boehner through much of this fight and others in the past year, and that’s because he cannot alienate Boehner allies. Many establishment conservative will still be around – and be a significant voting bloc – when Boehner retires, whenever that will be.

    The big campaign for speaker -- at some point -- could come between Cantor and Paul Ryan, who might -- or might not -- run for president in 2016. Ryan, by the way, voted yes last night, unlike Sen. Marco Rubio (R-FL), widely thought to be eyeing a 2016 bid.

    The roll call… Boomark it! GOP primary opportunists will comb this list. It’s going to be their TARP to run on.

    What now? Dates to watch…

    TRIPLE JEOPARDY (H/T NBC’s Mike Viqueira for the headline and Essa Yip for the dates)
    Late Feb/early March – Debt ceiling
    March 1 - Sequester
    March 27 – Budget resolution

    (*Note to pithy catch-phrase writers, please refrain from using “March Madness” for the next fiscal showdown. New Year’s was already ruined with talks of rocky abysses, can we preserve what is a sacred time for some of us?)

    'Debacle for the Republican Party'... Chuck Todd on TODAY:

    “What’s coming in March with what they’ve done, and, by the way, they’ve done this to themselves now multiple times. I mean, this is the story, this 112th Congress does leave us today, and some would say finally leaves us, because this is the story of this Congress. Every major decision that they came up with, and it began with a threat of a government shut down just two months into this Congress. And then of course we had the debt ceiling showdown, then it culminated with this fiscal cliff and all we’ve done is created what’s coming in March, and Matt, what’s coming in March? Take all the fights we had separately and put them in one fight. And put them all expiring at the same time – debt ceiling, funding the entire federal government (that expires), and then this. …

    “The relationship between House Speaker John Boehner and the White House is terrible. Let’s not pretend they can get anything done, and yet you still have to get something through the House. Perhaps this renewed relationship between the White House, Joe Biden, in particular, and Mitch McConnell is a way to get some things done, but it is going to dominate this thing, and one thing to look back here and to figure this out, Republicans have to figure out what they want. If you look back on it, Matt, this was a debacle for the Republican Party. I mean, yesterday we almost had the Republican leadership in the House almost completely undermine the Republican leadership in the Senate. It looked like they threatened to scuttle the whole thing, and they ended up helping Barack Obama raise taxes more than any Republican Party in a generation has helped anybody raise taxes, and they got nothing for it. … The Republican Party has to figure out what it wants to be, first, before they sit down at the negotiating table. And then they’ve got to figure out who’s going to do the negotiating for them. Is it Mitch McConnell? Is it John Boehner? Who runs the Republican Party? I think that’s unclear out of all of this. … Until the Republican Party figures is sort of unified in what it wants to do, it’s not going to be an effective negotiating force against the president.”

    A tax hike or a tax cut? Which is it? Grover Norquist tweeted last night: “The Bush tax cuts lapsed at midnight last night. Every R voting for Senate bill is cutting taxes and keeping his/her pledge.”

    Thought exercise though: How would it be a tax increase on Dec. 31 but a tax cut on Jan. 1, even if it was the same piece of legislation? That’s more of a question perhaps for Heritage, et al.

    Simpson-Bowles see “missed opportunity”… Simpson and Bowles write in a statement from “Fix the Debt” that last night was a “missed opportunity.” Full statement:

    “The deal approved today is truly a missed opportunity to do something big to reduce our long term fiscal problems, but it is a small step forward in our efforts to reduce the federal deficit.  It follows on the $1 trillion reduction in spending that was done in last year’s Budget Control Act. While both steps advance the efforts to put our fiscal house in order, neither one nor the combination of the two come close to solving our Nation's debt and deficit problems. Our leaders must now have the courage to reform our tax code and entitlement programs such that we stabilize our debt and put it on a downward path as a percent of the economy. Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs. We have all known for over a year that this fiscal cliff was coming.  In fact Washington politicians set it up to force themselves to seriously deal with our Nation’s long term fiscal problems. Yet even after taking the Country to the brink of economic disaster, Washington still could not forge a common sense bipartisan consensus on a plan that stabilizes the debt.

    “It is now more critical than ever that policymakers return to negotiations that will build on the terms of this agreement and the spending cuts in the Budget Control Act. These future negotiations will need to make the far more difficult reforms that bring spending further under control, make our entitlement programs sustainable and solvent, and reform our tax code to both promote growth and produce revenue.  We take some encouragement from the statements by the President and leaders in Congress that they recognize more work needs to be done.  In order to reach an agreement, it will be absolutely necessary for both sides to move beyond their comfort zone and reach a principled agreement on a comprehensive plan which puts the debt on a clear downward path relative to the economy.”

    Gentlemen, language, please… Politico’s provocative lede: “House Speaker John Boehner couldn’t hold back when he spotted Senate Majority Leader Harry Reid in the White House lobby last Friday. It was only a few days before the nation would go over the fiscal cliff, no bipartisan agreement was in sight, and Reid had just publicly accused Boehner of running a ‘dictatorship’ in the House and caring more about holding onto his gavel than striking a deal. ‘Go f— yourself,’ Boehner sniped as he pointed his finger at Reid, according to multiple sources present. Reid, a bit startled, replied: ‘What are you talking about?’ Boehner repeated: ‘Go f— yourself.’

    “The harsh exchange just a few steps from the Oval Office — which Boehner later bragged about to fellow Republicans — was only one episode in nearly two months of high-stakes negotiations laced with distrust, miscommunication, false starts and yelling matches as Washington struggled to ward off $500 billion in tax hikes and spending cuts.”

    CHASER: "I can't tell him to do that. That. He can't do that to himself. You're crazy. You're absolutely crazy. You're getting as bad as Biden." -- Clint Eastwood, Aug. 30, 2012, during RNC Convention speech.

    Step back… For all the drama and ugliness of sausage making, step back and realize there were two votes on major legislation yesterday 20 hours apart.

    Fly-by signing… The bill will be flown out to Hawaii for President Obama to sign.

    Sandy funding… Notice, by the way, that New York, New Jersey, and Connecticut lawmakers were irate last night that, despite what they say were promises made by GOP leadership, Sandy funding wasn’t considered after the fiscal-cliff vote. Rep. Peter King, a Republican, is making the cable rounds today. NBC’s Frank Thorp has the details.

    And what about guns? National Journal… National Journal notes that pro-gun Democrats could pave the way for new gun measures. From the story: Pennsylvania Sen. Bob "Casey’s introspection isn’t a unique tale among normally pro-gun Democrats. Across Capitol Hill, lawmakers ranging from Sen. Joe Manchin of West Virginia to Rep. John Yarmuth of Kentucky are acknowledging that last week’s tragedy has, at least for now, left them open to reconsidering measures they once staunchly opposed.”

    Message will matter, says Rep. Mike Thompson (D-CA), an avid hunter and Vietnam vet: “Well, we can start by not calling it ‘gun control.’”

    But sticking point: “Not all Democrats are conceding that gun-control measures need to be taken. Senate Finance Committee Chairman Max Baucus, D-Mont., a longtime advocate of gun owners, isn’t making a decision right away on where he stands, despite being hounded with questions about it. He said he needs to hear from his constituents before he can decide on whether to vote for an assault-weapons ban or other gun laws that could be considered in the Senate.”

  • Obama calls on Congress to act on Hurricane Sandy relief

    President Obama released a statement Wednesday calling on the House of Representatives to pass disaster-related funding for the areas of the East Coast impacted by Hurricane Sandy last fall: 

    It has only been two months since Hurricane Sandy devastated communities across New York, New Jersey, and Connecticut as well as other eastern states. Our citizens are still trying to put their lives back together. Our states are still trying to rebuild vital infrastructure. And so, last month, working closely with the Governors of the affected states, I sent Congress an urgent request to support their efforts to rebuild and recover.

    The Senate passed this request with bipartisan support. But the House of Representatives has refused to act, even as there are families and communities who still need our help to rebuild in the months and years ahead, and who also still need immediate support with the bulk of winter still in front of us.
     
    When tragedy strikes, Americans come together to support those in need. I urge Republicans in the House of Representatives to do the same, bring this important request to a vote today, and pass it without delay for our fellow Americans.

  • 'Betrayal': Congress punts on Sandy recovery funding, infuriating local lawmakers

    Updated 10:40 a.m. -- Just as the fiscal-cliff negotiations are drawing to a close, a fresh controversy is brewing in the House of Representatives after Republican leadership decided they will not vote during the 112th Congress on a bill to provide supplemental aid to victims of Superstorm Sandy.

    Both Republicans and Democrats lashed out at Republican leadership for what one Republican called a "personal betrayal," after it was decided that the bill would not be considered until the 113th Congress, which convenes at noon Thursday.

    "For the Speaker to just walk out is inexcusable," Rep. Peter King (R-NY-Long Island) told reporters. "It's wrong, and I'm saying that as a member of the Republican Party."

    A spokesman for House Speaker John Boehner (R-OH) said in a short statement: "The Speaker is committed to getting this bill passed this month." 

    That assurance was not enough for the members of districts affected by Sandy.

    "I feel it is a personal betrayal," Rep. Michael Grimm (R-NY-Staten Island) said. "But I think more importantly, when you parse out all the politics, the people of this country that have been devastated are looking at this as a betrayal by the Congress and by the nation, and that is just untenable and unforgivable."

    A bipartisan group of eight lawmakers gathered after protesting the move on the House floor after the House vote late Tuesday night to pass a bill to avert the so-called "fiscal cliff." That bill passed 257-167. 

    The House had originally planned to consider a two-step bill that would start with $27 billion in supplemental aid, but also include an amendment worth an additional $33 billion. The bill had been split to allow conservative Republicans to vote for a base level of additional aid, but not the entire package, which many Republicans said did not entirely go to those affected by Sandy.

    The Senate passed a bill on Dec. 28 by a vote of 61-33 that would provide $60.2 billion in additional aid to victims of Superstorm Sandy. During that vote 12 Republicans voted for the measure, but only after a replacement amendment that would have stripped $35 billion from the bill failed to pass.

    "It passed the Senate in a bipartisan way," Rep. Nita Lowey (D-NY) said. "And again, to me, this is a real betrayal, a betrayal of the leadership of the Republican Party."

    According to House Minority Whip Steny Hoyer (D-MD), he had been speaking with House Majority Leader Eric Cantor (R-VA) on a regular basis about when the bill would be coming to the floor for a vote. 

    Cantor, whose office schedules what bills come to the floor and when, told Hoyer that he was "99.9 percent confident" that the bill would be considered after the fiscal-cliff legislation was considered.

    "I urge the Speaker to reconsider and bring this bill to the floor," Hoyer said. "Do not walk away from these millions of people; do not walk away from these states that have been damaged."

    An aide for Cantor said that the majority leader "is committed to ensuring the urgent needs of New York and New Jersey residents are met, and he has been working tirelessly toward that goal."

    But even after these conversations between Cantor and other members of the House, it's unclear why Republican leadership decided not to consider the bill before the 112th Congress came to a close. 

    FEMA told lawmakers in December they have enough emergency funds to take them through the spring, but the members protesting the change Tuesday night said the supplemental bill includes key funds for programs that go past the emergency phase of the Superstorm Sandy response.

    An emotional King went so far Wednesday to urge residents of New York and New Jersey to halt donations to his own party in the House as a result of the chamber's inaction. 

    "I’m saying right now, anyone from New York or New Jersey who contributes one penny to congressional Republicans is out of their minds," he said on Fox News. "Because what they did last night was put a knife in the back of New Yorkers and New Jerseyans. It was an absolute disgrace.”

    The House is in session Wednesday, beginning at 10:00 am ET, but according to aides, no legislation is scheduled to be considered.  The 112th Congress must adjourn by 11:59 am ET Thursday, so the 113th Congress can gavel in at noon on that day.

    Any legislation that passed either the House or Senate has to be re-passed once the new Congress is sworn in.

    NBC's Carrie Dann contributed to this report.

  • Fiscal cliff deal a 'debacle' for the GOP, sets up bigger fight in months

    Analysis:  After a 2012 election that launched countless queries about the future of a fractured Republican party, 2013 -- so far -- is not looking exactly like a year of Kumbaya for the GOP.

    NBC's political director, Chuck Todd, weighs in on the current Congress and the decision to pass the fiscal cliff bill, calling it a "debacle" for the GOP. Unless they unify on their aims, Todd says, "they are not going to be an effective force."

    The short-term compromise that Congress passed  last Tuesday night to avoid the immediate impacts of the so-called fiscal cliff only sets up much bigger battles in the coming months as Washington will once again square off over automatic cuts in military and non-entitlement discretionary spending, the budget resolution and an extension of the nation’s ability to continue borrowing.

    “This is the story of this Congress, “ NBC’s Chuck Todd said on Wednesday’s “Today” show.  “Every major decision that they came up with, and it began with a threat of a government shut down just two months into this Congress. And then of course we had the debt ceiling showdown, then it culminated with this fiscal cliff and all we’ve done is created what’s coming in March. … Take all the fights we had separately and put them in one fight. And put them all expiring at the same time – debt ceiling, funding the entire federal government (that expires), and then this.”

    J. Scott Applewhite / AP

    House Speaker John Boehner and House Majority Leader Eric Cantor walk to a Republican conference meeting to discuss the "fiscal cliff" bill.

    Todd called the deal to avoid the fiscal cliff a “debacle” for the Republican Party.  “yesterday we almost had the Republican leadership in the House almost completely undermine the Republican leadership in the Senate. It looked like they threatened to scuttle the whole thing, and they ended up helping Barack Obama raise taxes more than any Republican Party in a generation has helped anybody raise taxes, and they got nothing for it. … The Republican Party has to figure out what it wants to be, first, before they sit down at the negotiating table. And then they’ve got to figure out who’s going to do the negotiating for them. Is it Mitch McConnell? Is it John Boehner? Who runs the Republican Party? I think that’s unclear out of all of this. … Until the Republican Party figures is sort of unified in what it wants to do, it’s not going to be an effective negotiating force against the president.”

    The late-night House vote that approved a compromise deal to avert the fiscal cliff included notable divisions between Republican leaders, with some of House Speaker Boehner's top deputies breaking with him to oppose a measure that might have been embraced by conservatives two decades ago.

    Tuesday night’s drama helped show that there is a governing majority in Congress of sorts -- just not one that necessarily includes the majority of the party that will continue to control the House of Representatives for at least the next two years.

    Majority Leader Eric Cantor, R-Va., Majority Whip Kevin McCarthy, R-Calif., and Chief Deputy Whip Peter Roskam of Illinois all voted against the deal, which garnered only 85 Republican ayes compared to 151 Republican nos.

    NBC's Domenico Montanaro reports that while some are reading into the House Speaker John Boehner-Majority Leader Eric Cantor vote split, there isn't likely a Machiavellian undermining of Boehner at play by Cantor.

    The strong opposition from House Republicans was surprising in light of an overwhelming vote from GOP senators early Tuesday morning. Just eight in the upper chamber -- and just five Republicans -- opposed the deal, with one 'no' vote -- from Florida's Marco Rubio -- sparking instant speculation about how opposition to the agreement would impact his possible presidential ambitions.

    On the House side, Budget Committee Chairman and possible 2016 presidential contender Paul Ryan did support the deal, prompting questions about how the former vice presidential candidate would justify supporting tax increases during future Republican primary debates against Rubio.

    The immediacy of that speculation points to the dramatic rift within Boehner's caucus between pragmatism and purity on taxes and spending, a divide deepened by the fact that most of his caucus members are far more vulnerable to primary challenges from within their own party than from general election losses.

    President Obama will sign the "fiscal cliff" legislation approved by a divided House of Representatives, preventing middle class tax hikes and huge spending cuts that many feared could have pushed the economy into a new recession. NBC's Kelly O'Donnell reports.

    While the cliff deal contained plenty for Democrats to cheer (or at least breath a sigh of relief for) -- including none of the expected changes to Social Security and Medicare feared by progressives -- it also offered plums for Republicans who have long fought for reforms to tax rates on estates and investment income.

    But those components, as well as the codification of Bush-era tax cuts for a majority of American families, were not enough to win the support of conservatives who were largely swept into office with promises to eliminate red tape, slash federal spending, and adhere to a rigid program of tax cuts -- including those for wealthy "job creators."

    "The day is coming when principled pragmatic Constitutional Conservatives will be sought after to restore the American Republic, and we will answer the call," said departing Rep. Allen West of Florida.

    Rep. Chris Van Hollen, D-Md., joins Morning Joe to discuss the last-minute agreement reached by the House on New Year's Day. The New Yorker's John Cassidy also joins the conversation.

    Other opponents included outspoken conservatives considered possible contenders in future Senate races, like Reps. Jason Chaffetz of Utah and Steve King of Iowa. Incoming senators Jeff Flake of Arizona and Tim Scott of South Carolina also voted no, despite the overwhelming bipartisan vote for the deal in the upper chamber.

    The deeper-than-expected divisions in the vote left Boehner in the rare situation of being a majority leader on the losing end of legislation opposed by a majority his own caucus. While he did support the Senate-passed fiscal deal after weeks of haggling, he did not speak on the floor in support of the bipartisan compromise on the final day of debate.

    (That's not to say that the famously emotive Boehner was leading a chorus of praise for the Democrats who pushed the Senate measure; he reportedly offered Senate Majority Leader Harry Reid an unprintable four-letter recommendation in exchange for Reid's suggestion that he was leading "a dictatorship" in the House.)

     

    NBC's Carrie Dann contributed to this report

     

  • Bipartisan outrage after House skips vote on $60 billion Sandy aid bill

    House Republicans have abandoned plans to vote on an aid package for victims of Superstorm Sandy in the current term of Congress after the Senate approved more $60 billion to help affected residents recover. TODAY's Willie Geist reports.

    WASHINGTON -- The House of Representatives adjourned on Tuesday night without acting on a $60 billion superstorm Sandy disaster aid bill, prompting angry denunciations from members from the states hardest hit by the storm.

    The GOP leadership was criticized for what one Republican called a "personal betrayal" after it was decided that the bill would not be considered until the 113th Congress, which convenes at noon on Thursday.

    The current session of the House comes to an end officially on Wednesday after the new Congress elected in November gets sworn in. Legislation does not carry over from session to session, so consideration of an aid bill would have to start all over if, as expected, nothing is scheduled before then.

    "I have just been informed that we will be having perhaps no further votes in this Congress," said Democratic Representative Steny Hoyer of Maryland. "I am deeply disappointed at that information. We have millions of our fellow citizens who have been badly damaged by a storm called Sandy."

    "We help each other," Representative Rush Holt, a Democrat of New Jersey, said on the House floor. "We always have ... There are thousands of people who are not going back to their homes. They deserve our help."

    Mario Tama / Getty Images

    Residents of the Northeast are still picking up the pieces after Superstorm Sandy.

    They and others pleaded with the Republican leaders of the House to rethink the decision, but few were in the chamber to listen. House Speaker John Boehner of Ohio and Majority Leader Eric Cantor of Virginia are in charge of scheduling the House.

    "For the Speaker to just walk out is inexcusable," Representative Peter King, a New York Republican, told reporters. "It's wrong and I'm saying that as a member of the Republican Party."

    'Unforgivable'
    In a statement, a spokesman for Boehner said: "The Speaker is committed to getting this bill passed this month." That assurance was not enough for the members who have districts that were affected by Sandy.

    "I feel it is a personal betrayal," said Representative Michael Grimm, a New York Republican. "But I think more importantly, when you parse out all the politics, the people of this country that have been devastated are looking at this as a betrayal by the Congress and by the nation, and that is just untenable and unforgivable."

    A bipartisan group of eight lawmakers gathered after protesting the move on the House floor after the House voted late Tuesday night to pass a bill to avert the so-called "fiscal cliff." That bill passed 257-167.

    President Obama will sign the "fiscal cliff" legislation approved by a divided House of Representatives, preventing middle class tax hikes and huge spending cuts that many feared could have pushed the economy into a new recession. NBC's Kelly O'Donnell reports.

    The October 29 storm devastated New York and New Jersey coastlines with lesser damage felt along coastal areas of Delaware and Maryland.

    The Senate passed a bill on December 28 by a vote of 61-33 that would provide $60.2 billion in additional aid to victims of superstorm Sandy.

    During that vote, 12 Republicans supported the measure, but only after a replacement amendment that would have stripped $35 billion from the bill failed to pass.

    Full Sandy coverage from NBC News

    "It passed the Senate in a bipartisan way," said Representative Nita Lowey, a New York Democrat. "And again, to me this is a real betrayal, a betrayal of the leadership of the Republican Party."

    The House had originally planned to consider a two-step bill that would start with $27 billion in supplemental aid, but also include an amendment worth an additional $33 billion.  The bill had been split to allow conservative Republicans to vote for a base level of additional aid, but not the entire package, which many Republicans said did not entirely go to those affected by Sandy.

    "If we get into the next Congress, you have to hit the reset button," said Representative Jon Runyan, a New Jersey Republican who added that the Sandy aid package has been largely drowned out in recent days by negotiations over the "fiscal cliff" tax hikes and spending cuts that were set to kick in starting on Tuesday.

    J. Scott Applewhite / AP

    Rep. Peter King, R-N.Y., left, joined by other New York area-lawmakers affected by superstorm Sandy, express their anger and disappointment after learning the House Republican leadership decided to allow the current term of Congress to end without holding a vote on aid for the storm's victims, at the Capitol in Washington, early Wednesday.

    Many Republicans in Congress say that the Sandy aid bill contains billions of dollars in spending on projects unrelated to damage caused by the storm or for long-term infrastructure improvements that should compete with other discretionary spending.

    Among expenditures criticized was $150 million to rebuild fisheries, including those in the Gulf Coast and Alaska, thousands of miles from Sandy's devastation, and $2 million to repair roof damage that pre-dates the storm on Smithsonian Institution buildings in Washington.

    Democrats, including New York and New Jersey senators, have argued that long-term rebuilding projects such as tunnel repairs would be delayed if the full funding was not approved. They say that businesses would not start to rebuild if they were not confident of reimbursement.

    An aide for Cantor said that the House Majority Leader "is committed to ensuring the urgent needs of New York and New Jersey residents are met, and he has been working tirelessly toward that goal."

    NBC News' Frank Thorp and Reuters contributed to this report.

  • Fiscal cliff compromise leaves few satisfied

    President Obama praised lawmakers and Vice President Joe Biden after the House of Representatives voted to pass a Senate measure to avert the most serious impacts of the so-called "fiscal cliff."

    The last-minute deal-making on Capitol Hill may have helped avert the fiscal cliff for now, but many commentators expressed pessimism over the agreement and the distressing sight of lawmakers allowing the world’s largest economy to teeter near economic disaster.

    “This is a bad bill that made a bad situation worse,” Richard Haas, the president of the Council on Foreign Relations, said Wednesday on MSNBC’s Morning Joe.

    “The only thing it did was avoiding sending the signal (to the rest of the world) that we’re reckless and out of control,” he added.

    Consumers, businesses and financial markets have been rattled by the months of budget brinkmanship. The crisis ended when dozens of Republicans in the House of Representatives buckled and backed tax hikes approved by the Democratic-controlled Senate.

    But even with the agreement, more budget drama is expected on the way. In February, Congress will have to decide what to do about a slew of other spending cuts. Then, in March, lawmakers will decide on whether to increase the federal borrowing limit.

    “We could see an early lift in the markets because of relief the deal went through,” Gary Thayer, the chief macro strategist at Wells Fargo Advisors, told The New York Times. “The response may be muted because the deal left out many long-term issues.”

    'A missed opportunity'
    Erskine Bowles and Alan Simpson, who headed a deficit commission for Obama, said lawmakers missed a "magic moment to do something big" for the American economy.

    “The deal approved today is truly a missed opportunity to do something big to reduce our long term fiscal problems, but it is a small step forward in our efforts to reduce the federal deficit,” they said in a joint statement released Tuesday.

    PhotoBlog: Deal done, Obama heads back to Hawaii with a weary wink

    In a scathing editorial, the Wall Street Journal called for the parties to go their own ways in Congress and tried to rally Republicans against Obama.

    “Having been cornered into letting Democrats carry this special-interest slag heap through the House, Speaker John Boehner should from now on cease all backdoor negotiations and pursue regular legislative order. House Republicans should pursue their own agenda and let Mr. Obama and Senate Democrats pursue theirs. Mr. Obama has his tax triumph. Let it be his last,” it wrote on the editorial page.

    Economists had been warning that the tax increases and spending cuts could take a chunk out of the U.S. economy.

    PhotoBlog: Behind the scenes as Congress works overtime

    But early Wednesday, world markets registered relief over the deal.

    Benchmarks in Australia and Hong Kong boomeranged on the first trading day of the year. Asian markets had slipped on Monday, fearing that negotiations over the measure might collapse.

    Many analysts were gloomy about long-term prospects.

    “The process was so chaotic and the outcome so unsatisfactory that we are likely to see a further U.S. downgrade at some point,” Steven Englander, fixed-income strategist at Citi, wrote in a research note.

    The House voted Monday to approve the Senate's fiscal cliff bill by a vote of 257-167. Richard Lui, Luke Russert and Mike Viqueira report on MSNBC.

    But China's state news agency Xinhua took a more severe view, warning the United States must get to grips with a budget deficit that threatened not a "fiscal cliff" but a "fiscal abyss." Most of China's $3.3 trillion foreign exchange reserves are held in dollars.

    Bipartisan outrage after House skips vote on $60 billion Sandy aid bill

    For the Washington Post, the entire episode was depressing.

    The newspaper expressed discouragement for what the episode suggests for political compromise going forward.

    “The United States will have to wait longer yet for its inevitable budget reckoning,” it wrote in an editorial.

    “We hope the nation’s leaders will be able to accomplish in stages what they have been unable to do in a series of self-imposed crises: raise more revenue and significantly reduce future entitlement spending. But the fiscal cliff episode offers little encouragement,” the newspaper concluded.

    Reuters and The Associated Press contributed to this report.

     

  • With Cantor opposed, House vote on fiscal cliff compromise remains in doubt

    Resistance from House Republicans, including Majority Leader Eric Cantor, threw into doubt whether a last-minute compromise measure to pull the U.S. back from the so-called fiscal cliff could come to a vote Tuesday.

    With just two days to spare, House Republicans were in a series of meetings to figure out how to respond to the Senate's 89-8 vote in the middle of the night to stave off a series of tax increases and steep spending cuts automatically taking effect in the new year.


    Rep. Steven LaTourette, R-Ohio, explains why some House Republicans, including Majority Leader Eric Cantor, opposed the Senate-backed fiscal bill.

    Cantor, the No. 2 House Republican behind Speaker John Boehner, told reporters Tuesday that he didn't support the agreement and that no decisions on how to move forward had been made.

    Rep. Steven LaTourette, R-Ohio, told NBC News that while he was personally inclined to vote for the agreement because he didn't want to hold the country "hostage,"  the consensus among his fellow Republicans was that "it's heavy on tax increases and it has nothing on spending reductions."

    "From a Republican standpoint, that's not the balanced approach the president was talking about," he said.

    A Republican lawmaker told NBC News on condition of anonymity that at the Republican meeting, 37 of 40 members who spoke on the bill opposed it. He said many of his colleagues were demanding "illogical concessions," including billions of dollars in extra spending cuts that Democrats wouldn't be able to live with.

    House Majority Leader Eric Cantor reportedly is opposed to the Senate-approved fiscal bill. NBC's Mike Viqueira reports.

    The Republican majority in the House is likely to send the bill back to the Senate with amendments to cut more spending, said Rep. Spencer Bachus, R-Ala.

    "I would be shocked if this bill didn't go back to the Senate," he said. "I think we're there on more revenue, but, you know, there is more revenue but no spending cuts."

    Democratic House members, including Minority Leader Nancy Pelosi, called on Republcans to bring the measure to an up-or-down vote.

    The Senate adjourned until Wednesday, meaning it wouldn't consider any House amendments Wednesday.

    The 113th Congress, meanwhile, is scheduled to be sworn in Thursday. Unless the current Congress can reach an agreement, the next Congress would have to start fresh to find a fix.

    As the Republicans' discussions wore on, House Democrats convened a news briefing to press them to approve the compromise as is.

    Democratic leader Nancy Pelosi of California called for "a straight up-or-down vote on what the Senate passed last night," saying: "I think that we've made gigantic progress."

    And Rep. Xavier Becerra, D-Calif., said: "We hope the House will respect the wishes of the people's representatives and allow members to vote."

    The Senate measure 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.

    The high-stakes drama appeared to have been resolved after days of back and forth between Vice President Joe Biden and Seate Republican leader Mitch McConnell of Kentucky, 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 Senate 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
    Boehner so far has refused to endorse the agreement. Iin a statement issued Tuesday by his office, Boehner and Cantor said, "The lack of spending cuts in the spending was a universal concern among members in today's meeting."

    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.

    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.

    NBC News' Kelly O'Donnell contributed to this report.