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WASHINGTON — The Senate overwhelmingly passed a bill early this morning that will avoid sending the nation’s economy plummeting off the fiscal cliff — if the House goes along with it.
The Senate vote — which came nearly two hours after the original midnight deadline — was 89-8.
Congress has a chance to finish the job later today before the cliff’s massive tax hikes take a bite out of middle-class paychecks, or stocks tank on Wall Street, which is closed because of New Year’s.
The Republican-run House of Representatives was hoping to take up the measure today.
Shortly after the Senate vote, President Obama said, “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.”
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“We are very, very close,” Senate Minority Leader Mitch McConnell (R-Ky.) had said after striking a deal yesterday and before this morning’s vote.
“Let’s pass the tax-relief portion now. Let’s take what’s been agreed to and get moving,” said McConnell, who led the negotiations for the Republicans.
“The president wants this, members of Congress want to protect taxpayers, and we can get it done now.”
Obama heralded the deal as “within sight” at a hastily arranged White House press conference on Monday, where he also prodded Republicans to accept the bargain.
“One thing we can count on with respect to this Congress is that if there’s even one second left before you have to do what you’re supposed to do, they will use that last second,” he said, with a group of middle-class Americans as a backdrop.
Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) signed off on the pact, Reuters said.
Vice President Joe Biden met with Senate Democrats late last night to sell them on the agreement.
The Senate deal settled the central argument over taxes and especially the hot-button issue of tax hikes on the rich.
The two sides also reached an agreement to postpone for two months massive spending cuts, mostly to the military, that would have taken effect automatically as part of the fiscal cliff.
Under the tax deal, rates jump from 35 percent to 39.6 percent for individual incomes over $400,000 and family incomes over $450,000.
The rich also get hit with higher taxes on capital gains, dividends and inheritances over $5 million.
For example, taxes on capital gains and dividend income for individual incomes over $400,000 and family incomes over $450,000 would go from 15 percent to 23.8 percent, including a 3.8 percent ObamaCare tax.
Low-income households would benefit from the extension of various tax credits, including ones for college tuition.
Unemployment benefits for the long-term jobless would be extended for another year.
The deal does not include an extension of the payroll Social Security tax cut, allowing the rate to revert to 6.2 percent from the current 4.2 percent.
That tax was reduced in 2009 as part of Obama’s economic-stimulus package, and it was expected to expire.
A House GOP leadership aide downplayed the fact that the legislative body failed to vote on the measure before the deadline.
The aide stressed that legislation as important as avoiding the fiscal cliff and saving the economy was “not something to be brought up in the dead of night.”
The outline of the deal immediately drew criticism from the left.
Rep. Jerrold Nadler (D-Manhattan) called it a “tremendous victory for Republicans,” and said he was cranky about plans to exempt almost all multimillion-dollar estates from the new higher inheritance tax.
The 11th-hour agreement hammered out by McConnell and Biden was the first concrete compromise on tax rates since the fiscal-cliff budget battle started more than a year ago.
Obama backed off his initial demand that taxes go up on individual incomes over $200,000 and family incomes over $250,000.
McConnell gave up the GOP’s ingrained opposition to any tax hikes at all.
Obama touted several tax credits that he said would be in the compromise, including clean-energy tax credits, tuition tax credits, and the child tax credit.
Meanwhile, the GOP rapped Obama’s campaign-like event yesterday, where he chided Congress.
“In the middle of sensitive negotiations, he’s running a political campaign with props behind him? I find it unseemly,” fumed Rep. Chris Smith (R-NJ).
With AP