Not Solved Yet: GOP Wants More Cliff Spending Cuts

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  • WASHINGTON (AP) — Emergency legislation to avoid the economy-threatening fiscal cliff ran into vehement New Year’s Day opposition from House Republicans, casting doubt on the divided government’s ability to prevent widespread tax increases and painful, across-the-board federal spending cuts.

    “I do not support the bill. We are looking, though, for the best path forward,” House Majority Leader Eric Cantor, R-Va., declared after a closed-door meeting of his party’s rank and file.

    While Speaker John Boehner took no public position, an attempt to add spending cuts was all but certain before the leadership called for a final House vote on the measure that cleared the Senate hours earlier in a pre-dawn vote of 89-8.

    Any change in the legislation would require the Senate to re-pass the measure before it could go to President Barack Obama for his signature, and his aides met at the White House to review the bill’s prospects.

    There was no immediate response to the House Republicans from Senate Majority Leader Harry Reid, D-Nev., or from Sen. Mitch McConnell of Kentucky, the Republican leader who negotiated the final bill with Vice President Joe Biden.

    It wasn’t the first time that the tea party-infused House Republican majority has rebelled against the party establishment since the GOP took control of the chamber 24 months ago. But with the two-year term set to end Thursday at noon, it was likely the last. And as was true in earlier cases of a threatened default and government shutdown, the brinkmanship came on a matter of economic urgency, leaving the party open to a public backlash if tax increases do take effect on tens of millions.

    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.

    The Senate-passed bill was designed to prevent that while providing for tax increases at upper incomes, as Obama campaigned for in his successful bid for a second term.

    It would also prevent an expiration of extended unemployment benefits for an estimated two million jobless, block a 27 percent cut in fees for doctors who treat Medicare patients, stop a $900 pay increase for lawmakers from taking effect in March and head off a threatened spike in milk prices.

    At the same time, it would stop $24 billion in spending cuts set to take effect over the next two months, although only about half of that total would be offset with spending reductions elsewhere in the budget.

    The non-partisan Congressional Budget Office said the measure would add nearly $4 trillion over a decade to federal deficits, a calculation that assumed taxes would otherwise have risen on taxpayers at all income levels. There was little or no evident concern among Republicans on that point, presumably because of their belief that tax cuts pay for themselves by expanding economic growth and do not cause deficits to rise.

    The relative paucity of spending cuts was a sticking point with many House Republicans. Among other items, the extension of unemployment benefits costs $30 billion, and is not offset by savings elsewhere.

    “I personally hate it,” said Rep. John Campbell of California. “The speaker the day after the election said we would give on taxes and we have. But we wanted spending cuts. This bill has spending increases. Are you kidding me? So we get tax increases and spending increases? Come on.”

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