WASHINGTON — Maine Sens. Olympia Snowe and Susan Collins joined the vast majority of their Senate colleagues early Tuesday morning in supporting a compromise “fiscal cliff” bill that increases taxes on the wealthy but postpones hard choices on spending cuts.

The bill, if approved by the House, would avoid income tax increases on most Americans but contains compromises that displease both Democrats and Republicans. The 89-8 vote took place after 1:30 a.m. Tuesday when most of Washington was either winding down their New Year’s celebrations or already asleep.

For Snowe, the vote might have been the final one of her 34-year career in Congress. Snowe said the fact that the vote came so late – several hours after the nation had gone off the fiscal cliff – underscored the frustrations that prompted her to retire.

“We’ve had many questions that have been difficult to resolve, but never have we come up against this kind of deadline where the entire country and the world was focused,” Snowe said in an interview immediately afterward. “And it turns out to be New Year’s Eve and New Year’s Day when we finally cast our votes on an issue that could have major economic consequences to the country and to most Americans.”

Collins and Snowe, both Republicans, had already indicated a willingness to endorse higher taxes for wealthier Americans. Like many of their colleagues, they said the final package was far from perfect but, most importantly, avoided tax hikes on the middle class.

“It’s not the bill that I would have written but, on balance, I think that it will help protect our middle-income families and our small businesses, in many cases, and prevent us from inflicting a severe shock on our economy,” Collins said while leaving the Capitol complex just before 2 a.m.


The bill approved by the Senate and now headed to the House maintains current income tax levels for most families. Individuals earning $400,000 or more and households earning in excess of $450,000 will see their income tax rates rise from 35 percent to 39.6 percent.

The bill would also shield most middle-income families from the alternative minimum tax, or AMT, continues existing tax breaks for families and will allow 2 million Americans and 6,000-plus Mainers jobless for six months or longer to continue to qualify for unemployment benefits.

Most workers will still see a drop in their take-home pay, however, because the bill would not extend the temporary 2 percent payroll tax cut that has been in place for two years. And Congress will have to deal with how to administer across-the-board spending cuts that have been suspended for 2 months.

Collins said she was disappointed that the compromise would “kick the can down the road” on the spending cuts, also known as sequestration. Both she and Snowe have expressed concerns about how the cuts would affect Maine businesses, particularly those in the defense industry.

But Collins said she believed it was important to prevent an average tax increase of more than $2,000 on Maine families. She also was pleased with language in the bill that would avoid a law change that could have caused milk prices to nearly double. The compromise falls short of the dairy pricing system overhaul contained in a new, 5-year Farm Bill still in limbo, however.

Snowe, who is retiring this week after 16 years in the House and 18 years in the Senate, said the most critical issue for her was to avoid tax increases on the middle class. Snowe had said that, absent another deal, she would have been willing to vote for the Democratic plan increasing taxes on those earning $250,000 or more. But Snowe said she believes the higher threshold could be better for small businesses.


“Obviously there is much more work to be done on long-term debt reduction, entitlement reform and tax reform, frankly,” Snowe said. “Nevertheless, the imperative of reaching of an accord also demonstrates at least some capacity to reach agreement on key issues, even if it is at the 11th hour.”

The bill now heads to the more conservative House for consideration. Maine’s two House members, Democratic Reps. Chellie Pingree and Mike Michaud, have supported the Democratic plan to raise taxes on those earning $250,000 or more while extending the current tax rates for others.

Without a deal to avoid the fiscal cliff, Mainers would pay $1.4 billion more in taxes in 2013 due to all of the tax changes that kicked in on Jan. 1, according to calculations by Maine Revenue Services. That’s equates to roughly a 2.6 percent reduction in take-home pay statewide.


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