Congress sends bill to Obama

WASHINGTON - Past its own New Year's deadline, a weary Congress sent President Barack Obama legislation to avoid a national "fiscal cliff" of middle class tax increases and spending cuts late Tuesday night in the culmination of a struggle that strained America's divided government to the limit.

The bill's passage on a bipartisan 257-167 vote in the House sealed a hard-won political triumph for the president less than two months after he secured re-election while calling for higher taxes on the wealthy.

Moments later, Obama strode into the White House briefing room and declared, "Thanks to the votes of Republicans and Democrats in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing tax hikes that could have sent the economy back into recession."

He spoke with Vice President Joe Biden at his side, a recognition of the former senator's role as the lead Democratic negotiator in final compromise talks with Senate Republican Leader Mitch McConnell of Kentucky.

In addition to neutralizing middle class tax increases and spending cuts taking effect with the new year, the legislation will raise tax rates on incomes over $400,000 for individuals and $450,000 for couples. That was higher than the thresholds of $200,000 and $250,000 that Obama campaigned for. But remarkably, in a party that swore off tax increases two decades ago, dozens of Republicans supported the bill at both ends of the Capitol.

Nevada's delegation split on the measure. Democratic Rep. Shelley Berkley and Republican Rep. Joe Heck voted for the bill. Republican Rep. Mark Amodei voted against it.

Heck said he would have preferred more spending reductions in the bill but "ultimately it was more important to protect Nevada families and businesses from these unprecedented tax increases."

Heck said in a statement that the process of working through the holidays and beyond the year-end deadline to address the tax and spending crisis was a bad mark on Congress.

"One thing we all can agree on is that Washington's addiction to creating crises, pushing serious decisions to the eleventh hour, and passing temporary measures to avoid making tough choices continues to result in gross fiscal mismanagement and the erosion of the trust of the American people in their elected leaders," Heck said.

Amodei said the measure was far from a fix. It merely sets the stage for another crisis in February when the government hits its limit on borrowing.

"I respectfully decline to support a measure that raises $41 in revenue for every dollar of spending cuts," Amodei said, citing Congressional Budget Office figures. "This is not a balanced approach."

"I will not tell the Nevadans I represent that this bill is anything resembling a solution to the fiscal and economic sickness that threatens all of us," Amodei said.

In what became the final vote of her 14-year congressional career, Berkley said the measure "is a good deal for what it is. It doesn't fix our long-term economic problems but on the whole in a revenue bill it is a good one."

Berkley said her vote was tied among other things to the bill's extension of the earned income tax credit, the deduction for state and local sales taxes and the permanent patch that aims to shield middle-income filers from the alternative minimum tax.

The Senate approved the measure on a vote of 89-8 less than 24 hours earlier, and in the interim, rebellious House conservatives demanded a vote to add significant spending cuts to the measure. But in the end they retreated.

The measure split the upper ranks of the Republican leadership in the House.

Speaker John Boehner of Ohio voted in favor, while Majority Leader Eric Cantor of Virginia and California Rep. Kevin McCarthy, the party's whip, opposed the bill.

Supporters of the bill in both parties expressed regret that it was narrowly drawn, and fell far short of a sweeping plan that combined tax changes and spending cuts to reduce federal deficits.

Majority Republicans did their best to minimize the bill's tax increases, just as they abandoned their demand from earlier in the day to add spending cuts to the package.

"By making Republican tax cuts permanent, we are one step closer to comprehensive tax reform that will help strengthen our economy and create more and higher paychecks for American workers," said Rep. Dave Camp of Michigan, chairman of the tax-writing House Ways and Means Committee.

The bill also prevents an expiration of extended unemployment benefits for an estimated two million jobless, blocks a 27 percent cut in fees for doctors who treat Medicare patients, stops a $900 pay increase for lawmakers from taking effect in March and heads off a threatened spike in milk prices.

It would stop $24 billion in across-the-board spending cuts set to take effect over the next two months, although only about half of that total would be offset with savings elsewhere in the budget.

Economists have warned that without action by Congress, the tax increases and spending cuts that technically took effect with the turn of the new year at midnight could send the economy into recession.

Even with enactment of the legislation, taxes are on the rise for millions.

A 2 percentage point temporary cut in the Social Security payroll tax, originally enacted two years ago to stimulate the economy, expired with the end of 2012.

Neither Obama nor Republicans made a significant effort to extend it.

Stephens Washington Bureau Chief Steve Tetreault contributed to this story.