Senate sends $1.8 trillion deal to Obama

The Senate voted overwhelmingly Friday in favor a $1.8 trillion package of spending bills and tax breaks, sending the legislation to President Obama’s desk for his signature. 

The 65-33 vote effectively wraps up the congressional session for the year, with the House and Senate adjourning for the holiday recess. 

{mosads}Senate Majority Leader Mitch McConnell (R-Ky.) hailed the vote as a major accomplishment fulfilling his 2014 campaign pledge to get the Senate back on track if voters gave Republicans control.

“But we’re proving that you can still get a lot done with a President from a different party,” McConnell said on the floor. “We’re proving you can actually enact significant, long-term reforms, achieve conservative policy goals, and get them signed into law.”

Senate Democratic Leader Harry Reid (Nev.) said his party deserves credit for working with Republicans after they repeatedly filibustered his agenda in the past several Congresses.

“This session of the Senate has been a demonstration of what can happen when a minority is not trying to block everything,” he said.

The Senate’s presidential candidates split on the legislation.

Sens. Ted Cruz (R-Texas), Rand Paul (R-Ky.) and Bernie Sanders (I-Vt.) voted no, while Sen. Lindsey Graham (R-S.C.) voted yes. Sen. Marco Rubio (R-Fla.) was the only presidential candidate to miss the vote.

The legislation increases defense and nondefense spending above the caps set by the 2011 Budget Control Act, reflecting a budget deal reached by Obama and congressional leaders earlier this year.

It places a two-year moratorium on two key pieces of ObamaCare: the “Cadillac tax” on expensive health plans and the medical device tax. It also freezes the premium tax on health insurers for one year.

In total, it reduces revenue for the landmark healthcare reform law by $35 billion.

The administration opposed postponing the Cadillac tax, which not only funds ObamaCare but is supposed to serve as an important incentive for curbing healthcare costs, but won several policy victories in exchange.

The bill will make permanent three core elements of Obama’s 2009 fiscal stimulus: expansions of the Child Tax Credit, the Earned Income Tax Credit and the American Opportunity Tax Credit for college tuition.

Republicans secured several permanent tax breaks for the business community, with the research and development tax credit and the Section 179 small-business expensing deduction among the biggest wins.

In other big concession to the GOP, the legislation lifts the decades-old ban on oil exports, which could boost domestic oil production by as much as 500,000 barrels a day.

In return, Democrats gained five-year extensions of wind and solar tax breaks. The legislation extends the 30-percent solar Investment Tax Credit (ITC) and the credit for solar-powered energy-efficient properties for three years, phasing it down in the final two. 

It extends the wind protection tax credit for two years before a three-year phase-down, ending in 2022.    

The House voted overwhelmingly to pass the $1.1 trillion omnibus spending bill and the $622 billion tax package separately in action earlier Friday. The cost of the tax legislation is not offset and will add to the deficit.

The two bills were merged into one and delivered to the upper chamber as a message from the House.  

Republican presidential front-runner Donald Trump slammed GOP congressional leaders for busting the 2011 spending caps with the omnibus and pairing it with a massive unpaid-for package of tax breaks.

“In order to avoid a government shutdown, a cowardly threat from an incompetent president, the elected Republicans in Congress threw in the towel and showed absolutely no budget discipline,” he said in a statement. “The American people will have to absorb higher deficits, greater debt, less economic liberty and more corporate welfare.”

The vote caps weeks of intense negotiations that took place between the leaders of both chambers and the appropriations and tax-writing committees.

Democrats beat back waves of Republican riders that would have rolled back parts of the 2010 Dodd-Frank Wall Street Reform Act, limited the ability of the Environmental Protection Agency to regulate carbon emissions, and removed the limit on coordination between political parties and candidates.

The legislation, however, does include two riders blocking the administration from moving ahead with two key campaign finance regulations. It stops the Securities and Exchange Commission from requiring corporations to disclose their political giving and the IRS from issuing new rules governing the activity of 501(c)4 social welfare advocacy groups.

– This story was first post at 10:54 a.m. and has been updated.