Tax deal is a done deal

TAX DEAL IS A DONE DEAL…. It seems hard to believe, but the tax policy agreement reached by the White House and congressional Republicans was unveiled just last week. Given the initial response, it was hard to imagine this week’s House and Senate votes would turn out to be so one-sided.

Indeed, over the course of about 10 days, the tax deal made the transition from a crash-and-burn failure drawing the ire of both left and right to legislative success with bipartisan support. Very few, if any, efforts in the last two years have passed by such wide margins, and reversed their political fortunes so quickly.

On Wednesday, the Senate approved the deal after an 81-to-19 vote. Last night, hours after a procedural setback, the House followed suit.

Congress at midnight Thursday approved an $801 billion package of tax cuts and $57 billion for extended unemployment insurance. The vote sealed the first major deal between President Obama and Congressional Republicans as Democrats put aside their objections and bowed to the realignment of power brought about by their crushing election losses.

The bipartisan support for the tax deal also underscored the urgency felt by the administration and by lawmakers in both parties to prop up the still-struggling economy and to prevent an across-the-board tax increase that was set to occur if the rates enacted under President George W. Bush had expired, as scheduled, at the end of the month.

The House bill is identical to the Senate measure, so there will be no additional wrangling. The agreement now heads to the White House, and President Obama is expected to sign it into law today.

Here’s the final roll call in the House, which voted 277 to 148. A majority of Democrats in the chamber ended up supporting the deal (139 to 112), and a majority of Republicans did the same (138 to 36). Off the top of the head, I don’t think any other major legislation in this Congress received this kind of bipartisan support.

The dust hasn’t quite settled on this one, but it’s not too early to wonder how, exactly, the deal ended up passing after an angry initial response. I’d argue the turning point came during a Senate Democratic caucus meeting last week in which White House budget director Jacob Lew and senior Treasury adviser Gene Sperling offered a compelling presentation.

Vice President Biden had spoken to the same conference the day before, and didn’t persuade members at all. A day later, Lew and Sperling pointed almost exclusively to economic projections, and went with a much softer sell — answering questions rather than giving instructions. It proved quite effective. After the meeting, much of the opposition among Senate Dems withered, and House Dems began to realize they didn’t have the backup they’d need for a prolonged fight.

Also note that the right, which tends to be unified on these issues, struggled to settle on a specific tack. Some groups and leading personalities balked, but their opposition seemed half-hearted, and was generally drowned out by criticism of the deal from the left. Rank-and-file Republicans, then, never really felt pressure from their base, at least not enough to sway the outcome in any meaningful way.

The result is a win for the White House, which still hopes to pick up a few more victories before the lame-duck session concludes.