The bill would boost the top 35 percent income tax rate to 39.6 percent for incomes exceeding $400,000 for individuals and $450,000 for couples, while continuing decade-old income tax cuts for everyone else. In his re-election campaign last year, Obama had vowed to boost rates on earnings at somewhat lower levels—$200,000 for individuals and $250,000 for families.

Scores of GOP lawmakers voted for the measure, reversing a quarter-century of solid Republican opposition to boosting any tax rates at all.

The bill also would raise taxes that top earners pay on dividends, capital gains, and inherited estates; permanently stop the alternative minimum tax from raising levies on millions of middle-income families; extend expiring jobless benefits for another year; prevent cuts in Medicare reimbursements to doctors; and delay for two months billions in budget-wide cuts in defense, education, and other domestic programs slated for this year.

Both sides lamented their failure to reach a significant deficit-cutting agreement. But neither much mentioned another omission: The immediate expiration of a two-year, 2-percentage-point cut in the Social Security payroll tax.

That break, which put an extra $1,000 in the wallets of typical families earning $50,000 a year, was an Obama priority two years ago as a way to boost consumer spending and spark the flagging economy, but it fell victim this time to other priorities.

House Democrats voted by an overwhelming 172-16 for the agreement, which was crafted over the weekend by Senate Minority Leader Mitch McConnell, R-Ky., and Vice President Joe Biden.

But Republicans tilted against it, 151-85. It is rare for leaders to bring a bill to the House floor that will be opposed by most lawmakers from their own party, and the decision underscored the pressure GOP leaders felt to approve the legislation.

Boehner, R-Ohio, took no public stance on the measure before the vote. But he guided the compromise to the House floor after an unsuccessful attempt by many conservatives to persuade leaders to add spending cuts to the bill.

Had the House inserted those budget cuts and the Senate refused to consider them, the legislation could have died. That left House Republicans worried that voters might blame them for a huge, sweeping tax increase and for any swoon the nation’s financial markets might take when they reopened Jan. 2.

“You can be right and you can be dead right. Which is it?” said Rep. Rich Nugent, R-Fla., of the quandary Republicans faced. “Right now, you need to take the tax issue off the table” and move on to a focus on curbing spending, he said.

Boehner voted for the bill, an unusual step because speakers seldom vote, and he was joined by Rep. Paul Ryan, R-Wis., the GOP’s vice presidential candidate last fall. Voting “no” were the other two top GOP leaders, Reps. Eric Cantor of Virginia and Kevin McCarthy of California.

Passage came nearly 24 hours after a decade’s worth of tax cuts enjoyed by tens of millions of Americans expired with the stroke of the new year, technically raising taxes by more than $500 billion in 2013 alone.

Those tax increases—plus $109 billion in defense and domestic spending cuts that were to be automatically triggered on Jan. 2—became known as the fiscal cliff. Economists warned that their combined impact would hurl the economy back into recession, but Obama’s signature on the bill would prevent the “fiscal cliff” from taking hold.

Obama can sign the bill remotely using a machine called an “autopen,” or the bill can be flown to Hawaii for his signature.

Overall, the legislation would add nearly $4 trillion to federal deficits over the next decade, compared with what would have happened had all the tax cuts expired, according to the nonpartisan Congressional Budget Office.

“I’m embarrassed for this generation. Future generations deserve better,” complained one foe, Rep. Louie Gohmert, R-Texas.

The agreement’s journey to passage was a tortured one. It included negotiations between Obama and Boehner on a larger, deficit-cutting deal that collapsed, and a failed effort by the speaker to drum up enough GOP votes to pass a “Plan B” that would have limited tax boosts to incomes exceeding $1 million.

It took weekend talks between McConnell and Biden, former Senate colleagues, to craft the more modest package that focused on averting the worst impacts of the fiscal cliff while postponing any deficit reduction efforts to coming months.

Those first showdowns will come over the next three months, when the government’s legal ability to borrow money will expire and temporary financing for federal agency budgets will expire. Republicans have already said that, as they did in 2011, they will demand spending cuts as a condition for extending the debt ceiling.

(Next page: Reaction to the deal)


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