Late-night deal averts fiscal cliff

Just as it seemed Congress would close up shop for the year with no deal in place, the Senate reaches an interim agreement.

By Kim Peterson Dec 31, 2012 6:42PM

Image: Washington, D.C. (Bilderbuch/Design Pics/Corbis)Updated at 9 a.m. ET Tuesday

 

The Senate moved the U.S. economy back from the edge of the fiscal cliff early Tuesday morning, voting to avoid imminent tax hikes and spending cuts. But the bipartisan deal could still face stiff challenges in the House of Representatives.


As the hours ticked by on Monday, the last day of 2012, Congressional negotiators still hadn't found a solution to avoid $600 billion in tax hikes and spending cuts that kick in on Jan. 1. While a deal in the Senate appeared close, the House of Representatives took a break for the holiday with no vote in sight.


The good thing is that the tax part of this mess should be over with soon. For legislators, it now becomes almost easy. Even if the apparent Senate deal doesn't go through, tax rates will go up, and so lawmakers now can come to the rescue when they vote to extend the Bush tax cuts.

The main question is what the nation's wealthy individuals will get taxed at. And judging from news reports, it looks like the marginal income tax rates will rise to 39.6% for individuals making more than $400,000 a year and households making more than $450,000 annually.

Unemployment benefits are likely to get extended for a year and middle-class tax cuts could get continued for five years, Politico reports. The estate tax rates for high-value properties are set to increase.

Once the tax question is settled, then there's the issue of $109 billion in automatic cuts that will hit military and discretionary spending. That's the part holding up negotiations now, and that will likely take weeks to settle out.

And so ends a Congressional session we'd all like to forget. The Huffington Post reports that the 112th Congress is the most unproductive session since the 1940s. President Obama signed only 219 bills passed by this Congress. That's down from 383 bills passed by Congress last year and 460 bills the year before.

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64Comments
Jan 2, 2013 2:14PM
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It's a nice sleight-fo-hand that Obama and the Congress just pulled on most of the public . . . no more "fiscal cliff", right . . . everything's going to be all OK now.  NOT!

According to one report on the CBO analysis of the situation, the bill passed on Tuesday cuts the projected INCREASES in our Federal budget deficits over the next ten years from $4.65 trillion down to just $4 trillion.  That's chump change, folks.  And even that change is not something that "you can believe in" because who has the insight to accurately predict the fiscal situation in the US over any ten year span!

For the last four years we've run $1.1 to 1.5 billion dollar deficits such that our total Federal debt is now over $16 trillion.  With Congress' despicable reluctant to enact significant spending cuts, I'm sure nothing meaningful will be done to this effect in two months, or even two years.

Look for trillion-plus annual budget deficits to be the new norm, a "debt celing" (laughable term, given that it's been raised on average more often than once per year over the last 50 years) to be in excess of $20 triliion, and a further downgrade in the overall credit rating of the US.

So sad that it had to happen to a great country
Jan 2, 2013 12:13PM
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WHERE'S THE PART WHERE THEY GAVE HOLLYWEIRD 430 MILLION IN TAX BREAKS????? THAT'S HELPING WHO???????????

HIS FRIENDS HIS FAMILY HIS SUPPORTERS BIG UNIONS LIKE STIMULUS AND BAILOUTS????? WHAT A LYING HYPOCRITE?

WHERE'S THE TAX BREAK FOR SMALL BUSINESS AND MIDDLE CLASS? HE JUST RAISED THE PAYROLL TAX YOU DOPES?

YOU WILL SEE TAX HIKE AND LESS MONEY IN YOUR CHECK! HOW THE **** DOES HE GET AWAY WITH THIS ****!

Jan 2, 2013 12:08PM
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let's get the process straight here before you point fingers. The president doesn't hold power over the purse in Gov't. Congress has to act not the president. The president can propose, suggest and sign. It's clear now that the Tea party wingnuts are running the nuthouse and are the most dangerous group in congress.
Jan 2, 2013 11:36AM
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Just a good day to sit back and SIP some Fine Whiskey.....And muse about what has happened..??

 

Your Representatives and Senators are probably gathering for fine lunches, in small groups...

 

Congratulating each other, back slapping and saying they all won their points...

And giggling about how they bamboozled the Majority of Americans...

And they have a few more weeks to screw us over...

Light up the Cigars boys, and get the good booze out..

Jan 2, 2013 10:37AM
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OH, YEAH;.....I would like to be that Kool-Aid guy coming through the wall.....
Jan 2, 2013 10:25AM
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Pretty much correct Brutus......Gov. George Wallace called them out on it, back in the 60-70s (?)..

 

Pointed out the "Tweedle dee, Tweedle dum" mentality of the GOP/DEM's.

Ross Perot gave the Parties a scare also.....

 

It is very difficult to "keep or retain an honest man in the Congress," for much more then one term...

Repubs or Dems makes little difference, when they become beholden to Special Interest, Lobbies(good or bad) and the almighty dollar that so many worship from the Rich and Elite....

Even though some will do what they can for their electorate, eventually the common voters are forgotten....And the "greater good for Americans in general" goes by the wayside....

Very few, uphold their loyalty and original causes. 

Jan 2, 2013 10:12AM
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Ellen my dear.....Really not following the WW2 or Prison Camp thing..What's that about ??

Relating to any of this..?

Jan 2, 2013 8:58AM
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To all you freedom-loving, limited gov, fiscally conservative patriots:

What do you think of the Repubs now?  How much longer are you going to keep holding your collective noses and voting for this bunch of inept, incompetent, power-grabbing, big gov progressives, just because they have an "R" next to their name?  They love to talk about how conservative they are, but when it comes right down to it, their true colors show through.  The bill they just passed, with tax increases and more spending, is the polar opposite of basic conservative principles.  Are you going to look the other way and give them a pass, yet again?

Please, remember this moment and vote accordingly the very next chance you get.  The evidence is overwhelming - the future of the conservative movement does NOT lie with the Repub party.  The sooner you figure that out, the sooner we can move forward.

Jan 2, 2013 8:41AM
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@TsukiD - don't tell me concentration camps didn't exist during WWII - my father spent 18 months in a German prisoner of war camp - and eventually died as a result of the beatings, starvation, and other atrocities that were committed.  
Jan 1, 2013 11:11PM
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Well maybe, just maybe ??  With NO corrections to the Senate Bill....

 

Just can kickin' into the NEW Congress....

Jan 1, 2013 5:29PM
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Did anyone herd  Issa Darrell explaining this morning why he will  not approved the Fiscal  Cliff  Bill passed by the Senate to prevent the Cliff. We are shame of the Representative from California that just said " Bush did not pay for the tax cut, but it will be taken care of itself on time"  Just by magic,  what kind of verbal crap this guy talks" He doesn't want to pass the  Bill because it does not have cut, as he said  for "Medicare, and Social Security, and cutting tax just for the rich is not fair thing to do to the American people" America wake up, the Republicans and the Tea Party  only wants the decimation of the working class, the annihilation of the poor. lower wages, and the people of America just working for the rich.
Jan 1, 2013 4:57PM
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Dear Citizens of America.
Are we losing our mind?
I truly think that the near collapsed, and lingering hard times of our country economics from the faulty Bush presidency has produced some alarming public dementia that prevents millions of our best citizens to think correctly, so mistakes are frequently made, like the past election of radical, boisterous Tea Party members to The House of Representatives in 2010, and again in 2012! "Created the greatest produced economical chaos, and a lingering socio-political disaster" still seriously impacting our survivor as the Great United States of America. These elected representatives, their continuous perversive negations in passing Bills to help the economy, least to say presently the extraordinary opposition to help balance the Fiscal Budget by asking the very rich to contibute in tax increase after enjoying the Bush tax cut since 2004, getting richer on the back of the middle class! Where is their patriotism? America made all of them very rich! Pay back!

Remember now? During the last elections in 2012, we had a hopeful tea Party candidate that wllifully maneuvered the members in the un-ruling House of Representatives as his command, the guy was aspiring for a big job as our country VP, that was Paul Ryan, the supposly guru, the manuvered of poor Arithmetical Budgets to terminate Medicare, and Social Security as we had known it for many decades!
Is it our state of mental dementia so acute that’s preventing us to acknowledged that Paul Ryan, is a full flesh product of the incoherent Tea Party/Republican amalgamation, presently, and again residing in the House of Representatives after lossing the wanted VP in the last elections? Remmber, Congress still have a dishonorable 15% approval rate. Could this Paul Ryan person have make sound, integral, non-radical, honest decisions as a Vice-President, we don’t think so? Now he has strong spectations to be running as the president of our beaten country with the Tea Party, and  the Republican Party in 2016. We hope, America  have fully recovered from the disease before November, 2016, to vote full Democratic ticket again, and say one more time a big “ No”, to Paul Ryan wishes to be a president of our USA, that position is already reserved for Hillary Clinton.

Jan 1, 2013 4:53PM
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Wake up America!

The Fiscal Cliff. We think that the president has tried very hard to make terms to prevent the Cliff, while the Tea Party, and behind curtains, guys like Ryan and many others radical Republicans are fomenting discord and hatred among the more tolerant and fair members of the House of Representatives proposing phantom rejections not to attained an acceptance consensus among them! These rejections, all done with malice with a purpose of not accepting any proposal at all from the president. We, the Democratic Base are crying loud to our president not to try any longer, as any concession will be not accepted by the dissidents of the worse Congress we ever had. We think the American people know well  by now of the trials and tribulations of the president to prevent the Cliff, but we, the hard core Democratic Base ask for him to stand firm, no more nice little or big concessions, no more rolling over, no more giving the other chick to get slapped around! If the president does gives in, the destruction of our solid Democratic Base will be destroyed for ever instantaneously! We hope the president take the bitter pill with all of us, knowing that he has tried the best for these long four years to domesticate the beast, with no evident of any success. Let it be Mr. President! Win one more time with the million of us applauding you for your courage, and your firmness against the worse assault against the people of America since 911 fateful day                      of infamy against our dear citizens of America!

Jan 1, 2013 4:50PM
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I just read the new that Congress got a substantial raise. I cannot believed that the American people are so stupid to let these good for nothing Tea party, and Republicans in the House of congress get away with this complete abuse of the people of our country that work so hard to make end meet. These guys these morning want to kill the passing Bill from the Senate to avoid the Cliff, and the pervert of Cantor just said he do not like the Bill because he wants to see cuts in spending against the middle class and the poor. America get with it and kick these worthless out of Congress the first chance we get!
Jan 1, 2013 2:05PM
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Here's the Deal.....Lost on Earth, is a Happy person, he is going to get a raise like us...

 

He loves His Country.....And God blesses America...

 

I think that is the RIGHT attitude to have...Hopefully it will get better for many of you this year..

Have a Happy and Prosperous New year in 2013...

 

Attitudes are a great and meaningful share of our lives..Makes us who we are,or helps.

Jan 1, 2013 1:57PM
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Only 1% of Americans are Millionaires....Are they the ones considered the 1%'ers ??

I thought it took more then that ?

 

People wanting to blame the President and Congress for our problems....BUT isn't it the CONGRESS that ONLY HAS a 12% approval RATING....??  (I think the worst in recent history?)

 

And I would have thought, that the CAN had been KICKED to pieces by now...

Jan 1, 2013 1:25PM
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1% of the USA are millionaires ... But yet 48% of congress are .. LOL At the American people for putting this in place..

Jan 1, 2013 1:10PM
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Does the Federal Indictment of Grover Norquist happen now?

Does the Federal Indictment of Norquist Pledgers begin now?

Does the repeal and abolishment of the Gramm Leach Bliley Act begin now?

Does the restoration of the Glass Steagall Act begin now?

Do formal investigations of job blockading and alumni collusion begin now?

Do we ban pariah groups like Law Firms and all types of Funds now?

Do we eliminate all Trusts so every American has equal liability and exposure now?

Do we reduce hired-in administration pay to Minimum Wage now and recognize skill again?

 

It took Olympic effort to avert a Cliff Fall caused by bureaucrats.

I'd rate it a D- minus event.

The markets will go wild tomorrow but should be closed down.

Restore the currency to Main Street, eliminate Wall Street.

Recover AMERICA, do away with collusion and confusion.

While we still can.

Jan 1, 2013 1:02PM
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Huh?  Of course I know someone who's pleased with the bill negotiated yesterday.  I am thrilled.  It saves me at least $ 40,000 this year.  Much more, if I were to sell my house, as I hope to.

Didn't you notice that last night at midnight the taxes of virtually all Americans spiked far more than at any time in the past 30 years?  And then, fortunately, relief appeared to be in site when the Senate voted to roll back almost all of those tax increases, leaving in place only the rise on the very wealthiest taxpayers.  Well, I'm not one of them so obviously I'm very happy to have my taxes reduced.  Who wouldn't be?

I really can't believe you asked such a stupid rhetorical question.  The 30 millions Americans who have just been exempted from the Alternative Minimum Tax should be the most relieved.  Then there are all the others whose taxes were reduced from 5 to 15%.  And anyone receiving dividend income or capital gains -- everyone with a 401k or who owns a home - benefited the most.

Have you looked at your calendar?  It's 2013.  We fell off the fiscal cliff.  Only the Senate-passed bill gives us hope of reducing our taxes from this historically high level.  When/if President Obama signs it I will be breaking out the champagne . . . and thanking the Republicans who insisted on rolling back the iniquitous tax hike that became law last night.
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