Why U.S. lives under the shadow of 'W'

Julian Zelizer says former President George W. Bush's key tax and homeland security policies survive in the age of Obama

STORY HIGHLIGHTS

• Julian Zelizer: For all the criticism Bush got, two key policies have survived


• He says fiscal cliff pact perpetuates nearly all of Bush's tax cuts


• Obama administration has largely followed Bush's homeland security policy, he says


• Zelizer: By squeezing revenues, Bush tax cuts will put pressure on spending

Editor's note: Julian Zelizer is a professor of history and public affairs at Princeton University. He is the author of "Jimmy Carter" and of "Governing America."

Princeton, New Jersey (CNN) -- Somewhere in Texas, former President George W. Bush is smiling.

Although some Democrats are pleased that taxes will now go up on the wealthiest Americans, the recent deal to avert the fiscal cliff entrenches, rather than dismantles, one of Bush's signature legacies -- income tax cuts. Ninety-nine percent of American households were protected from tax increases, aside from the expiration of the reduced rate for the payroll tax.

Julian Zelizer

In the final deal, Congress and President Barack Obama agreed to preserve most of the Bush tax cuts, including exemptions on the estate tax.

When Bush started his term in 2001, many of his critics dismissed him as a lightweight, the son of a former president who won office as result of his family's political fortune and a controversial decision by the Supreme Court on the 2000 election.

But what has become clear in hindsight, regardless of what one thinks of Bush and his politics, is that his administration left behind a record that has had a huge impact on American politics, a record that will not easily be dismantled by future presidents.

The twin pillars of Bush's record were counterterrorism policies and tax cuts. During his first term, it became clear that Obama would not dismantle most of the homeland security apparatus put into place by his predecessor. Despite a campaign in 2008 that focused on flaws with the nation's response to 9/11, Obama has kept most of the counterterrorism program intact.

Opinion: The real issue is runaway spending

In some cases, the administration continues to aggressively use tactics his supporters once decried, such as relying on renditions to detain terrorist suspects who are overseas, as The Washington Post reported this week. In other areas, the administration has expanded the war on terrorism, including the broader use of drone strikes to kill terrorists.

Now come taxes and spending.

With regard to the Bush tax cuts, Obama had promised to overturn a policy that he saw as regressive. Although he always said that he would protect the middle class from tax increases, Obama criticized Bush for pushing through Congress policies that bled the federal government of needed revenue and benefited the wealthy.

In 2010, Obama agreed to temporarily extend all the tax cuts. Though many Democrats were furious, Obama concluded that he had little political chance to overturn them and he seemed to agree with Republicans that reversing them would hurt an economy limping along after a terrible recession.

Opinion: Time to toot horn for George H.W. Bush

With the fiscal cliff deal, Obama could certainly claim more victories than in 2010. Taxes for the wealthiest Americans will go up. Congress also agreed to extend unemployment compensation and continue higher payments to Medicare providers.

But beneath all the sound and fury is the fact that the 2001 and 2003 tax cuts, for most Americans, are now a permanent part of the legislative landscape. (In addition, middle class Americans will breathe a sigh of relief that Congress has permanently fixed the Alternative Minimum Tax, which would have hit many of them with a provision once designed to make sure that the wealthy paid their fair share.)

As Michigan Republican Rep. Dave Camp remarked, "After more than a decade of criticizing these tax cuts, Democrats are finally joining Republicans in making them permanent." Indeed, the Congressional Budget Office estimates that the new legislation will increase the deficit by $4 trillion over the next 10 years.

The tax cuts have significant consequences on all of American policy.

Opinion: Christie drops bomb on GOP leaders

Most important, the fact that a Democratic president has now legitimated the moves of a Republican administration gives a bipartisan imprimatur to the legitimacy of the current tax rates.

Although some Republicans signed on to raising taxes for the first time in two decades, the fact is that Democrats have agreed to tax rates which, compared to much of the 20th century, are extraordinarily low. Public perception of a new status quo makes it harder for presidents to ever raise taxes on most Americans to satisfy the revenue needs for the federal government.

At the same time, the continuation of reduced taxes keeps the federal government in a fiscal straitjacket. As a result, politicians are left to focus on finding the money to pay for existing programs or making cuts wherever possible.

New innovations in federal policy that require substantial revenue are just about impossible. To be sure, there have been significant exceptions, such as the Affordable Care Act. But overall, bold policy departures that require significant amounts of general revenue are harder to come by than in the 1930s or 1960s.

Republicans thus succeed with what some have called the "starve the beast" strategy of cutting government by taking away its resources. Since the long-term deficit only becomes worse, Republicans will continue to have ample opportunity to pressure Democrats into accepting spending cuts and keep them on the defense with regards to new government programs.

Politics: Are the days of Congress 'going big' over?

With his income tax cuts enshrined, Bush can rest comfortably that much of the policy world he designed will remain intact and continue to define American politics. Obama has struggled to work within the world that Bush created, and with this legislation, even with his victories, he has demonstrated that the possibilities for change have been much more limited than he imagined when he ran in 2008 or even in 2012.

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The opinions expressed in this commentary are solely those of Julian Zelizer.

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Relief for Google as US ends monopoly probe

WASHINGTON: US regulators Thursday closed a lengthy antitrust probe into Google, saying there was not enough evidence to show the Internet giant manipulated its search results to harm its competitors.

The Federal Trade Commission said it lacked a legal basis to bring a monopoly abuse case against Google for "search bias," as alleged by some rivals, but won commitments from the tech titan to end its "most troubling" practices on search and advertising.

FTC chairman Jon Leibowitz said the action concludes a year-and-a-half probe of the Internet giant, accused by rivals of abusing its market dominance.

Many of Google's critics "wanted the Commission to go further in this investigation and regulate the intricacies of Google's search engine algorithm," Leibowitz said.

The FTC "exhaustively investigated allegations that Google unfairly manipulated its search engine results to harm its competitors," but found the evidence did not support an enforcement action, he said.

"The facts weren't there under the law we apply," he Leibowitz added.

Even though some rivals dislike Google search, "it doesn't violate the American antitrust laws," he said.

Still, Google made "enforceable commitments" to change some practices criticised by rivals in a voluntary settlement.

Leibowitz said Google had "committed to stop the most troubling of its business practices related to Internet search and search advertising."

Google agreed to stop misappropriating or "scraping" the content of rivals that makes it appear as if it were from Google and to drop contractual restrictions that limited the ability of small businesses to advertise on competing search engines, he said.

In a separate patent case, Google agreed to an FTC order "to stop seeking to exclude competitors using essential patents," mainly from Motorola, which Google purchased, the FTC chief said.

The action in Washington leaves unclear the outcome of a similar probe by the European Commission into Google's alleged monopoly abuse.

The European Union said last month it was still seeking commitments from the US firm that it abused its dominant market position in Internet search.

Google's chief legal officer David Drummond said of the FTC decision: "The conclusion is clear: Google's services are good for users and good for competition."

Drummond added, "We've always accepted that with success comes regulatory scrutiny. But we're pleased that the FTC and the other authorities that have looked at Google's business practices... have concluded that we should be free to combine direct answers with Web results. So we head into 2013 excited about our ability to innovate for the benefit of users everywhere."

Leibowitz said Google's commitments are "binding" and "enforceable" because the company made a written pledge to the federal regulatory agency. Any violation of those promises could result in fines, he said.

"This is a major victory for Google," said Greg Sterling, an analyst with Sterling Market Intelligence who blogs at Search Engine Land.

"The search bias argument was always one of the hardest and most unconvincing parts of any potential case against Google -- though it's the issue competitors probably care most about."

Sterling said EU regulators "arguably have a stronger negotiating position than the FTC. The Europeans also seem more intent on exacting bigger concessions from Google than the FTC. Yet a full-blown antitrust action against the company in Europe is unlikely."

Google has close to 70 per cent of the search market in the United States, and more in some other markets.

According to the research firm eMarketer, Google had around 75 per cent of US Internet search advertising revenues and 93 per cent in the mobile search ad market.

- AFP/jc

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Boehner chokes up during speech

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FTC: Google does not violate antitrust laws

Google hasn't violated any antitrust laws, the Federal Trade Commission announced Thursday, but it has agreed to make some changes in how it treats its rivals as part of a settlement to end the 19-month investigation into its business practices.

The FTC's investigation focused on allegations that Google has been abusing its dominance in Internet search. Google's rivals say the company has been highlighting its own services on its influential results page while burying the links to competing sites.

Google Inc. has fiercely defended its right to recommend the websites that it believes are the most relevant.

The FTC said it voted unanimously to close the investigation on whether Google's algorithm unfairly favored itself because there was no evidence that Google violated antitrust laws.

"Although some evidence suggested that Google was trying to eliminate competition, Google's primary reason for changing the look and feel of its search results to highlight its own products was to improve the user experience," FTC chairman Jon Leibowitz said to reporters Thursday.

Google was also investigated for abusing patent protection against competitors like Apple. As part of the settlement, Google is agreeing to license patents deemed to be "essential" for rival mobile devices such as Apple Inc.'s iPhone and iPad, regulators said.

Regulators say Google is also promising that upon request, it will exclude snippets copied from other websites in its summaries of key information, even though the company had insisted the practice is legal under the fair-use provisions of U.S. copyright law.

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Sandy Hook Parents Cope With Students' Return

Sandy Hook parents put their children on school buses this morning and waved goodbye as the yellow bus rolled away, but this first day back since the pre-Christmas massacre is anything but normal for the families of Sandy Hook Elementary School.

Erin Milgram, the mother of a first grader and a fourth grader at Sandy Hook, told "Good Morning America" that she was going to drive behind the bus and stay with her 7-year-old Lauren for the entire school day.

"I haven't gotten that far yet, about not being with them," Milgram said. "I just need to stay with them for a while."

Today is "Opening Day" for Sandy Hook Elementary School, which is re-opening about six miles away in the former Chalk Hill school in Monroe, Conn.

Lauren was in teacher Kaitlin Roig's first grade class on Dec. 14 when gunman Adam Lanza forced his way into the school and killed 20 students and six staffers.

Roig has been hailed a hero for barricading her students in a classroom bathroom and refusing to open the door until authorities could find a key to open the door.

The 20 students killed were first-graders and the Milgrams have struggled to explain to Lauren why so many of her friends will never return to school.

Sandy Hook Elementary School: Ready to Return Watch Video

Newtown, Conn. Students Return to New Sandy Hook Watch Video

"She knows her friends and she'll also see on the bus... there will be some missing on the bus," Milgram said. "We look at yearbook pictures. We try to focus on the happy times because we really don't know what we're doing."

"How could someone be so angry?" Lauren's father Eric Milgram wondered before a long pause. "We don't know."

The school has a lecture room available for parents to stay as long as they wish and they are also allowed to accompany their children to the classroom to help them adjust. Counselors will be available throughout the day for parents, staff and students, according to the school's website.

The first few days will be a delicate balancing act between assessing the children's needs and trying to get them back to a normal routine.

"We don't want to avoid memories of a trauma," Dr. Jamie Howard told "Good Morning America." "And so by getting back to school and by engaging in your routines, we're helping kids to do that, we're helping them to have a natural, healthy recovery to a trauma."

Security is paramount in everyone's mind. There is a police presence on campus and drivers of every vehicle that comes onto campus are being interviewed.

"Our goal is to make it a safe and secure learning environment for these kids to return to, and the teachers also," Monroe police Lt. Keith White said at a news conference on Wednesday.

A "state-of-the-art" security system is in place, but authorities will not go into detail about the system saying only that the school will probably be "the safest school in America."

White said at a news conference today that the security presence would be evaluated on a day-by-day and week-by-week basis moving forward.

"We are trying to keep a balance," he said. "We don't want them [the students] to think that this is a police state. This is a school and a school first."

Every adult in the school who is not immediately recognizable will be required to wear a badge as identification, parent and school volunteer Karen Dryer told ABCNews.com.

"They want to know exactly who you are at sight, whether or not you should be there," Dryer said.

Despite the precautions and preparations, parents will still be coping with the anxiety of parting with their children.

"Rationally, something like this is a very improbable event, but that still doesn't change the emotional side of the way you feel," Eric Milgram said.

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Time to rebrand in Lincoln's image?

Wade Henderson thinks the modern Republican Party should look to Abraham Lincoln for some inspiration.

STORY HIGHLIGHTS

• Wade Henderson: January 1 is 150th anniversary of the Emancipation Proclamation


• He says GOP should look to Lincoln, a canny politician who led moral fight on civil rights


• He says GOP has history of civil rights support that it has largely abandoned in recent years


• Henderson: In 2012, election minority voters unimpressed; GOP should return to roots

Editor's note: Wade Henderson is the president and CEO of The Leadership Conference on Civil and Human Rights and The Leadership Conference Education Fund.

(CNN) -- On January 1, the nation will commemorate the 150th anniversary of the Emancipation Proclamation, which legally freed slaves in the secessionist Southern states. Meanwhile, thousands of theaters will still be presenting the film "Lincoln," portraying the soon-to-be-martyred president's efforts in January 1865 to persuade the House of Representatives to pass the 13th Amendment, outlawing slavery throughout the nation.

Coming at a time when many Republicans are seeking to rebrand their party, these commemorations of the first Republican president raise this question: Why not refashion the Grand Old Party in the image of the Great Emancipator?

Steven Spielberg's historical drama, as well as the biography upon which it is based, Doris Kearns Goodwin's "Team of Rivals: The Political Genius of Abraham Lincoln," both remind today's Americans that Lincoln was not only a moral leader but also a practical politician. The political identity that Lincoln forged for the fledgling Republican Party -- uniting the nation while defending individual rights -- was a winning formula for half a century, with the GOP winning 11 of 13 presidential elections from 1860 through 1908.

Wade Henderson

Moreover, support for civil rights persisted in the party throughout the last century. Among the Republican presidents of the 20th century, Theodore Roosevelt famously hosted Booker T. Washington at the White House. Dwight Eisenhower ordered federal troops to Little Rock, Arkansas, to enforce school desegregation. Richard Nixon expanded affirmative action. And George H. W. Bush signed the Americans with Disabilities Act into law.

Brazile: A turning point for freedom in America, 150 years later

In the U.S. Senate, such prominent Republicans as Edward Brooke of Massachusetts (the first African-American senator since Reconstruction), Jacob Javits of New York and Everett Dirksen of Illinois were strong supporters of civil rights, as were governors such as Nelson Rockefeller in New York, George Romney in Massachusetts and William Scranton in Pennsylvania.

Former California Gov. Earl Warren served as chief justice when the Supreme Court issued its decision in Brown v. Board of Education, ordering the desegregation of the nation's schools. As recently as 1996, the Republican national ticket consisted of two strong civil rights advocates, former Kansas Sen. Bob Dole and former New York Rep. Jack Kemp.

Unfortunately, by 2012, the Republican Party had veered far from its heritage as the party of Lincoln. Prominent Republicans supported statewide voter suppression laws that hit hardest at vulnerable minorities or called for the "self-deportation" of immigrants and their families.

While some Republican senatorial nominees needlessly offended women, leading moderates such as Maine Sen. Olympia Snowe and Ohio Rep. Steven LaTourette opted for retirement. In what I hope was rock bottom, 38 Senate Republicans rebuffed their former presidential nominee Bob Dole -- a wheelchair-bound war hero -- to block an international civil and human rights treaty for people with disabilities.

150 years later, myths persist about the Emancipation Proclamation

Not surprisingly, the GOP in the presidential race lost the black vote by 87 points, the Asian-American vote by 47 points, the Latino vote by 44 points and the women's vote by 11 points, according to CNN exit polls. As Republicans reflect on their path forward with minority voters and persuadable whites, there are opportunities to advance civil rights.

While the GOP has increasingly promoted diverse candidates, it has not yet begun to reflect the values of our diverse nation. Fiscally conservative officeholders can fight for civil and human rights.

Just a few years ago, Alabama Sen. Jeff Sessions championed a reduction in the sentencing disparity between people charged with possession of crack and powder cocaine. These are two forms of the same drug, but crack cocaine is used more by minorities and carried much harsher punishments for possession. Working with Sessions, civil rights advocates pushed to reduce this disparity significantly -- among the greatest advances in criminal justice reform in decades.

Looking toward to the 113th Congress, several civil rights initiatives would fit conservative values. They need congressional champions. Conservative lobbyist Grover Norquist and conservative strategist Richard Viguerie have called for criminal justice reforms that would reduce the number of prisoners in U.S. prisons.

The U.S. Chamber of Commerce has joined the civil rights coalition's call for federal initiatives to narrow the educational achievement gap between minority and white students. And more Republicans are joining Jeb Bush's support for comprehensive immigration reform that provides a pathway to citizenship for long-term, law-abiding residents.

Most importantly, the GOP must embrace one of Lincoln's most enduring legacies, the 15th Amendment, which guaranteed the right to vote regardless of race. The GOP must stop trying to suppress voters and begin to champion electoral reform that shortens lines and helps more people to vote.

Opinion: What Obama can learn from Lincoln

I don't expect another Abraham Lincoln or Frederick Douglass from the modern Republican Party -- I'll settle for a few more Jeff Sessions. When Republicans consider the consequences for their party's narrow appeal, they'll try to return to their roots.

I'm happy to help.

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The opinions expressed in this commentary are solely those of Wade Henderson.

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After Newtown, Colombia firm makes bullet-proof kid clothes

BOGOTA: Miguel Caballero has been making bullet-proof clothes for politicians and other bigwigs for 20 years, but not for kids. The latest US school massacre has changed that.

This year he plans a line for children -- T-shirts, vests, and combination backpack-vests -- and geared toward the US market.

Caballero has made good money in his 22-year-old business with a factory on the outskirts of Bogota. He sells around 50,000 garments a year that go for about US$2,000 a piece, but the US market had been tough to crack.

Then, after a lone and deranged gunman killed 20 small children and six staffers at Sandy Hook Elementary School last month in Newtown, Connecticut, he started getting orders from very worried parents.

"We would answer that we do not make clothes for kids. But the emails kept coming," Caballero said.

So, in just a week, he designed garments and subjected them to ballistic tests. Now his factory is fitted to churn out a first lot of 1,800 bullet-proof garments for children and is waiting for firm orders.

Carolina Ballesteros, Caballero's director of research and development, said the impact of the Newtown shooting was huge because of the age of most of the victims: just six and seven.

Asked how you explain to a child that simply going to school can be so dangerous you have to wear a bullet proof vest, Ballesteros explained that her company's garments are not designed for everyday use.

Rather, they are for emergencies, to be handed out by teachers when needed.

The new line is tailored for kids aged 8 to 16, with prices ranging from US$200 to US$400, depending on the garment and its size.

Caballero's factory employs 235 people, and 95 per cent of its output is exported to 23 countries in the Middle East and Latin America.

The company makes uniforms for security forces and suits for public figures in many countries, she said.

"Three royal families in the Middle East are customers of ours. We made a bullet-proof kimono for the American actor Steven Seagal. Our experience is beyond question," Ballesteros said.

- AFP/jc

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Fiscal cliff crises averted, but more fights loom

STORY HIGHLIGHTS

• Rise in rates is first for any Americans since '93, according to Tax Foundation


• The vote prevents tax increases for more than 98% of Americans


• It also wards off $110 billion in automatic cuts to domestic and military spending


• Reid accused Boehner of "dictatorship" Friday; Boehner responded with profanity

(CNN) -- After exhaustive negotiations that strained the country's patience, the House approved a bill to avert the dreaded fiscal cliff, staving off widespread tax increases and deep spending cuts.

In the 257-167 vote late Tuesday, 172 Democrats and 85 Republicans favored the bill; 16 Democrats and 151 Republicans opposed it.

The approved plan maintains tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000. It will raise tax rates for those who make more -- marking the first time since 1993 that federal income tax rates have gone up for any Americans, according to the Tax Foundation.

The bill also extends unemployment insurance and delays for two months the threat of sequestration, a series of automatic cuts in federal spending.

World markets rose after the news. U.S. stocks jumped, too, with the Dow rising 210 points after opening. And federal workers breathed a sigh of relief as the deal provides a reprieve from across-the-board cuts of 8% to 10% of their budgets. The Defense Department said it has stayed furlough notices for its civilian work force of 800,000, but Pentagon officials say they're worried that unpaid leave may be harder to implement later in the fiscal year.

"We hope Congress can find a way to end sequester once and for all," Pentagon spokesman George Little said.

Just hours before the bill passed, House Speaker John Boehner pitched to fellow Republicans the idea of amending the Senate-approved bill to add a package of spending cuts. He cautioned about the risk in such a strategy, saying there was no guarantee the Senate would act on it.

Rum, electric vehicles and motor sports: Nuggets in the fiscal cliff bill

By the end of the night, he was among the Republicans who voted for the bill as written.

President Barack Obama said he would sign the bill into law, but he did not say when. After the vote, he flew to Hawaii to rejoin his wife and daughters on their winter vacation.

Congress is planning to send the bill to the White House by early afternoon, a Republican leadership aide told CNN.

In practical terms, there's no urgency on the president's signature. It's up to the Obama administration to implement the budget and tax changes, and since the president has said he will sign the measure, the administration can begin planning for the changes immediately.

Had the House not acted, and the Bush-era tax cuts expired fully, broad tax increases would have kicked in. In addition, $110 billion in automatic cuts to domestic and military spending would have taken place.

The combined effect could have dampened economic growth by 0.5%, possibly tipping the U.S. economy back into a recession and driving unemployment from its current 7.7% back over 9%, according to economists' estimates.

While the package provides some short-term certainty, it leaves a range of big issues unaddressed.

It doesn't mention the $16.4 trillion debt ceiling that the United States reached Monday.

iReport: What's your message for Washington?

Come late February, Congress will have to tackle both the debt ceiling and the postponed sequester -- a legacy of the last battle over the debt ceiling, in 2011.

Obama warned Congress that he will not tolerate another act of prolonged brinksmanship.

"While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they've passed," he said after the Tuesday night vote.

"We can't not pay bills that we've already incurred. If Congress refuses to give the United States government the ability to pay these bills in time, the consequences for the entire global economy would be catastrophic -- far worse than the impact of the fiscal cliff."

How they voted: House | Senate

A partial victory

While the deal gives Obama bragging rights for raising taxes on the wealthiest Americans, it also leaves him breaking a promise.

Obama had vowed to raise tax rates for the top-earning 2% of Americans, including those with household income above $250,000 and individuals earning more than $200,000.

Raising the threshold for higher tax rates shrinks the number of Americans affected. While nearly 2% of filers have adjusted gross incomes over $250,000, only 0.6% have incomes above $500,000, according to the Tax Policy Center. By comparison, Census Bureau figures put the median U.S. household income at just over $50,000.

Some House Republicans weren't exactly overjoyed in voting for the plan.

Opinion: Look beyond the fiscal cliff

"I'm a very reluctant yes," said Rep. Nan Hayworth, an outgoing Republican representative from New York.

"This is the best we can do, given the Senate and the White House sentiment at this point in time, and it is at least a partial victory for the American people," she said. "I'll take that at this point."

Conservative lobbyist Grover Norquist, whose Americans for Tax Reform pushes candidates to sign a pledge never to raise taxes, said the plan preserves most of the Bush tax cuts and won't violate his group's beliefs.

"The Bush tax cuts lapsed at midnight last night," Norquist tweeted Tuesday. "Every (Republican) voting for Senate bill is cutting taxes and keeping his/her pledge."

The timing of the vote was crucial, as a new Congress is set to be sworn in Thursday. And without a breakthrough, the entire process would have had to start over.

Cliff deal spurs global market rally

Specifics of the plan

The legislation will raise roughly $600 billion in new revenues over 10 years, according to various estimates.

According to the deal:

-- The tax rate for individuals making more than $400,000 and couples making more than $450,000 will rise from the current 35% to the Clinton-era rate of 39.6%.

-- Itemized deductions will be capped for individuals making $250,000 and for married couples making $300,000.

-- Taxes on inherited estates will go up to 40% from 35%.

-- Unemployment insurance will be extended for a year for 2 million people.

-- The alternative minimum tax, a perennial issue, will be permanently adjusted for inflation.

-- Child care, tuition and research and development tax credits will be renewed.

-- The "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.

The Democratic-led Senate overwhelmingly approved the bill early Tuesday before passing it to the House.

As news about the fiscal cliff's deflection spread across the world, several markets reacted positively Wednesday.

Australia's ASX All Ordinaries index added 1.2%. South Korea's KOSPI gained 1.5%, and the Hang Seng in Hong Kong advanced 1.9%. Tokyo's Nikkei and the Shanghai Composite remain closed for holiday celebrations but will reopen later in the week.

More fiscal cliffs loom

Payroll taxes still set to go up

Despite the last-minute fiscal cliff agreements, Americans are still likely to see their paychecks shrink somewhat because of a separate battle over payroll taxes.

The government temporarily lowered the payroll tax rate in 2011 from 6.2% to 4.2% to put more money in the pockets of Americans. That adjustment, which has cost about $120 billion each year, expired Monday.

Now, Americans earning $30,000 a year will take home $50 less per month. Those earning $113,700 will lose $189.50 a month.

Opinion: Cliff deal hollow victory for American people

With the latest battle round over, lawmakers will next set their sights on the other items on their docket of congressional squabbles over money: the debt ceiling and resolving the sequester.

Obama said he hopes leaders in Washington this year will focus on "seeing if we can put a package like this together with a little bit less drama, a little less brinksmanship (and) not scare the heck out of folks quite as much."

He thanked bipartisan House and Senate leaders for finally reaching a resolution Tuesday, but said Congress' work this year is just beginning.

"I hope that everybody now gets at least a day off I guess, or a few days off, so that people can refresh themselves, because we're going to have a lot of work to do in 2013."

Read more: 5 things to know about the fiscal cliff

Angry rhetoric flew

In the tense days leading up to the deal, heated words flew between some Democrats and Republicans.

On Friday, after Democratic Senate Majority Leader Harry Reid accused Boehner of holding a "dictatorship" in his chamber, the House speaker responded with a profanity.

"Go f— yourself," Boehner said to Reid, according to a source with knowledge of the exchange in a White House lobby.

Big issues still pending

CNN's Dana Bash, Rich Barbieri, Charles Riley, Dana Ford, Matt Smith, Jessica Yellin, Deirdre Walsh and Ted Barrett contributed to this report.

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Sandy Hook survivors welcomed at new school

A man waves to a child on a bus on the first day of classes after the holiday break, in Newtown, Conn.,Wednesday, Jan. 2, 2013. / AP Photo/Jessica Hill

Updated 1:21 p.m. ET

MONROE, Conn. The children who escaped last month's shooting at Sandy Hook Elementary School in Newtown were welcomed Wednesday to a school in a neighboring town that was overhauled specially for them.

Play Video

Orientation day for Sandy Hook students

Play Video

Heroism of Sandy Hook teachers

The open house at the former Chalk Hill School in Monroe marks the students' first time in a formal classroom setting since the massacre on Dec. 14, when a gunman killed 20 of their fellow classmates and six educators. Classes are starting for the Sandy Hook students on Thursday.

The road leading to the school in a rural, largely residential neighborhood was lined with signs greeting the students, saying "Welcome Sandy Hook Elementary School" and "Welcome. You are in our prayers." Several police cars were parked outside the school.

Teams of workers, many of them volunteers, prepared the former Chalk Hill middle school with fresh paint and new furniture and even raised bathroom floors so the smaller elementary school students can reach the toilets. The students' desks, backpacks and other belongings that were left behind following the shooting were taken to the new school to make them feel at home. Superintendent Janet Robinson said the rooms may not look exactly the same, but the school has been renamed Sandy Hook Elemntary.

Monroe police officers said at a press conference Wednesday it was "the safest school" in the country.

Counselors say it's important for children to get back to a normal routine and for teachers and parents to offer sensitive reassurances.

When classes start on Thursday, Robinson said teachers will try to make it as normal a school day as possible for the children.

"We want to get back to teaching and learning," she said. "We will obviously take time out from the academics for any conversations that need to take place, and there will be a lot of support there. All in all, we want the kids to reconnect with their friends and classroom teachers, and I think that's going to be the healthiest thing."

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Lawmakers Furious at Boehner Over Sandy 'Betrayal'

Republican lawmakers from New York and New Jersey whose storm-ravaged residents are desperate for federal aid are fuming at their party's leaders for refusing to hold a vote on a $60 billion disaster relief package despite promises that help was on the way.

"This was a betrayal," Rep. Michael Grimm, R-N.Y., told ABC News.com. "It's just reprehensible. It's an indefensible error in judgment not have given relief to these people that are so devastated."

New Jersey Gov. Chris Christie, a Republican, called it a "dereliction of duty" in a joint statement with New York Gov. Andrew Cuomo, a Democrat.

"This failure to come to the aid of Americans following a severe and devastating natural disaster is unprecedented," the governors said.

Lawmakers were told by Speaker John Boehner, R-Ohio, that the relief bill would get a vote on Tuesday night following an eleventh hour vote on the fiscal cliff bill. But in an unexpected switch, Boehner refused to put the relief bill to a vote, leading to lawmakers from parties yelling on the floor of the House.

Congress historically has responded to natural disasters by promptly funding relief efforts. The Senate already passed its version of the bill that would replenish an emergency fund set to run out of cash next week and which will help repair subways and tunnels in New York City and rebuild parts of the New Jersey shore devastated by superstorm Sandy.

Time is particularly pressing, given that a new Congress will be sworn in Thursday. The Senate will therefore have to vote on the bill again before it comes to the House, which could be as late as February or March.

Boos as House Adjourns Without Hurricane Sandy Relief Watch Video

'Fiscal Cliff' Deal Passes House Despite GOP Holdouts Watch Video

Rep. Peter King, R- N.Y., took the floor of the House and to the airwaves and aimed his outrage squarely at Boehner, accusing him plunging "a cruel knife in the back" of storm-ravaged residents "who don't have shelter, don't have food," he said during a House session this morning.

"This is not the United States. This should not be the Republican Party. This shouldn't not be the Republican leadership," King said on the floor of the House.

He made no attempt to hide his anger, suggesting that residents in New York and New Jersey should stop sending money to Republicans and even questioning aloud whether he could remain a member of the party.

"Anyone who donates one cent to the Republican Congressional Campaign Committee should have their head examined," King, a staunch conservative and Republican congressman for 10 years, told CNN.

"They have written off New York and New Jersey. They've written me off…. Party loyalty, I'm over that. When your people are literally freezing in the winter… Then why should I help the Republican Party?" he added.

He said that Boehner refused to talk to Republican members from New York and New Jersey when they tried to ask him about the vote Tuesday night.

"He just decided to sneak off in the dark of night," King said.

Democrats were also outraged.

"It is truly heartless that the House will not even allow the Sandy bill to come to the floor for a vote, and Speaker Boehner should reconsider his ill advised decision," Sen. Chuck Schumer, D- N.Y., said in a statement.

October's storm was the worst natural disaster ever to hit the region, causing billions in damage and leaving 120 people dead.

More than 130,000 people are expected to make claims to the federal government, but without a funding increase only about 12,000 people can be covered with existing funds.

"It doesn't make sense they wouldn't vote on this. There are truly people in need," said Steve Greenberg, whose home was flooded and damaged by fire in the hard-hit Breezy Point section of Queens. "Not of these people are fit to serve," he said.

Grimm said Boehner's decision fuels a perception that the Republican Party does not care about people.

"It buys into the ideology that Republicans don't care and are callous," he said. Grimm said there were enough votes to get the bill passed and that it makes fiscal sense, because the money would go to help spur small businesses.

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