House Passes Tax Bill In Late-Night Session

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STEVE INSKEEP, host:

It's MORNING EDITION, from NPR News. Good morning. I'm Steve Inskeep.

DON GONYEA, host:

And I'm Don Gonyea.

It is the biggest tax bill to go through Congress in years. It sailed through the Senate but faced a tougher go in the House, with most of the opposition coming from President Obama's fellow Democrats. Still, the House did pass the tax deal just after midnight. The measure extends current tax rates for two more years, continues unemployment benefits, and it set the rate for estate taxes. It now heads to the president's desk. He is expected to sign it into law today.

NPR's Andrea Seabrook has been covering this story on Capitol Hill. She joins us now.

Good morning, Andrea.

ANDREA SEABROOK: Good morning, Don.

GONYEA: So a long night. I understand the situation got a bit messy. Democrats had to stop the debate for a time.

SEABROOK: Yeah, they did. They were going along and suddenly they realized they didn't have the votes to even support the framework around the debate. And so they kind of pulled everything from the floor, went into recess, worked it all out and brought it back later.

GONYEA: So Andrea, what was the Democrats' main complaint? Was it the estate tax question?

SEABROOK: The estate tax question was where they focused all of their energy. And in fact they tried to bring an amendment to make estate tax rates higher for upper-income Americans. But they also had a lot of other complaints. They wanted higher taxes for the wealthy. They thought that the payroll tax that most people - most wage earners would get was starving Social Security. And then, among Democrats, there's this general frustration with the fact that the tax cuts - which were passed originally in 2001 and 2003 under President Bush and were meant to be temporary - have now been extended even more.

Listen to this from Democrat Peter DeFazio or Oregon.

Representative PETER DEFAZIO (Democrat, Oregon): There is no such thing as a temporary tax cut. I hope the White House is listening. They're about to spring the trap.

GONYEA: OK. So there's an unhappy Democrat, to say the least. What about the Republicans in the House? Did they support it, like their Senate colleagues did?

SEABROOK: Oh, no. No, no.

(Soundbite of laughter)

SEABROOK: They weren't happy with it either, especially because it doesn't make these tax cuts permanent. It's only a two-year extension of them. A lot of Republicans said: What certainty does that bring to the market?

Here's another little bit of sound from the debate. This is from Indiana Republican Mike Pence.

Representative MIKE PENCE (Republican, Indiana): So I rise with a heavy heart today to say that as I look at this short-term tax deal negotiated by the White House, that I have concluded after much study that it's a bad deal for taxpayers. It'll do little to create jobs, and I cannot support it.

GONYEA: OK. So if so many people on both sides of the aisle hated it, how did this thing pass?

SEABROOK: Well, that's sort of the reason it passed. I know it's counter-intuitive, but, you know, genuine compromise, where every side gives a little, at least, is - may have worked for one of the first times in - that I can remember in the House of Representatives. That's what Florida Republican Ginny Brown-Waite said.

Representative GINNY BROWN-WAITE (Republican, Florida): The bill before us is not the bill that I would've written. It is not the bill that conservative radio talk show hosts or Tea Party constituents would've liked written. And it's not the bill that the New York Times editorial page or the president himself would have written. It's a compromise. This is what a compromise looks like.

SEABROOK: And in the end, Don, I think all those lawmakers were thinking in their minds of the much bigger mess that could have been caused by letting the tax rates shoot back up on January 1st and then trying to pass some retroactive tax cut. This way it's done. It's gone. It's on the president's desk, and the new Congress can start fresh in January.

GONYEA: NPR congressional correspondent Andrea Seabrook - up late last night, up early this morning. Thank you.

(Soundbite of laughter)

SEABROOK: Thanks, Don.

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