Members of the U.S. House are meeting this afternoon as they decide whether or not to support a last-minute deal that would pull back from the “fiscal cliff.” The Senate passed a compromise deal overnight Monday, and the legislation now goes back to the House.
Among other things, the deal raises income taxes on those who earn more than $400,000 and married couples with incomes above $450,000. Those in that tax bracket would see their marginal tax rate increase to 39.6 percent.
Capital gains would also be taxed at 20 percent rather than 15 percent. The deal would also prevent the Alternative Minimum Tax from hitting an additional 30 million Americans. The deal would also delays the automatic spending cuts known as “sequestration” from taking effect for two months (estimated to be about $109 million for the Department of Defense in that time) and extends long-term jobless benefits.
It passed the Senate by an 89-8 vote. South Carolina Sen. Lindsey Graham voted in favor of the deal. Sen. Jim DeMint, who is resigning his seat to become leader at the Heritage Foundation, did not vote.
However, it’s not known whether Republicans who control the House are willing to raise taxes on some higher-income Americans without any major spending cuts. That concern was echoed by Rep. Mick Mulvaney of South Carolina.
“Clearly, there are things in the tax code here that I like,” Mulvaney told Fox News on Tuesday morning, “But for those of us who are interested in cutting spending, it looks like there’s nothing in the bill there for us. That’ll make it very difficult to support the bill.”
Mulvaney also said he did not like that the deal only delays sequestration, because it means Congress will be right back in another tight spot come March.
However, Graham urged his colleagues to support the deal so they can force Democrats to address spending cuts during the looming fight over the debt ceiling. Graham told FOX News that he worries Republicans will be blamed for automatic tax increases on those who make less than $400,000 if the House rejects the deal. Instead, he wants Republicans to block another increase in the debt ceiling unless they get Medicaid, Medicare, and Social Security reforms.
“I’ve never seen a better chance for Republicans and Democrats to come together (and) reform entitlements in a way to save these programs,” Graham said. “In 2037, the debt’s going to be twice the size of our economy. The good news is we’re one big deal away from dominating the 21st Century. The bad news is that deal is elusive.”
It was not immediately clear how the other members of South Carolina’s House delegation would vote on the legislation, although lone Democratic Rep. Jim Clyburn is believed to support the deal.
In fact, both sides seem resigned to the fact that another big fight looms in two months. Even if the House approves the compromise, the current debt ceiling of $16.4 trillion is approaching quickly and the temporary delay in sequestration will end in March.