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 1, 2013 11:41AM
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Another raise for me, Democrats beating up Republicans and Jesus was a Socialist like myself. :-)

 

I love this Country!

 

God bless America!

Jan 1, 2013 10:55AM
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This is a surprise to anyone? I am disappointed when I by goods from an American company only to find when I receive it from UPS that the item is made in China. Designed and engineered here but made there,  why? Cheaper, of course. I would rather pay a few dollars more and find it made here. 
All Chinese labor is virtual slavery anyway, so those labor standards that are suppose to exist are entirely bogus. The best thing we could do for China is send all goods made there back  with a note  saying that until they treat their ppl like humans and not their government wealth machine, no American will buy their stuff. Remember that the Chinese gvt. owns much of the industrial capacity of the country. That is how they control their people.
Jan 1, 2013 10:24AM
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At the root of problem is the fact that reelecton concerns trump doing what is good for the country.These peple dont work. They are actually in session a small % of the year, a remaining relic from when they had to travel home by horse drawn carriages. I have no hope that any reform is forthcoming since the people that would have to enact change occupy the cushy offices.

A national and very strong push for term limits is our only hope. Career politicians have ruined our country. The prevailing atmosphere where lying and deceiving are the norm seems to be escalating. They get away with it because so many people get some form of giveaways and wont take any action that threatens their loot and a lot dont pay any attention at all.

Our president had the nerve to state in an interview yesterday that he had reduced spending by a trillion/yr. His own treasury annual reports states an increase of $1 trillion yr. There was no public outrage. That is the state of where we are. I am not picking on my president, all the politicians  do this kind of deception knowing at worse people dismiss it as typical.

 We the people need to get a sense of active citizenshp and start throwing these people out of office and start electing real patriots to office, not the career status seeking parasites that make up the bulk of Washington office holders we have now.

It wont be easy or quick. Term limits first, ban pork next so they cant buy votes with $ sent home, incrementally get rid of ALL subsidies, reform the tax code limiting deductions and ininitiating incentives for business, roll back regulations: There are 26,000 words in a regulation outlining how to regulate the price of cabbage, one 28 page section of the 2800 page Obamacare bill that has generated 13,000 pages of guidelenes.

If we dont get aggressive as citizens and work together, dems, repubs, independents, rich, poor, takers, slackers, we are doomed and what the takers dont yet realize is their source of funding is drying up so they do have a stake in a healthy economy and sending responsible peope to Washington.   

Jan 1, 2013 9:31AM
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I don' like to call people stupid, but the adminastration , and congress just do stupid things.  I blame the President for most of the problems, but congress isn't far behind.  I blame the President because he is in charge.  So he has the responsibility .  I don't want to compar all of them to clowns! Why because being a clown is a respectional profession so in don't won't to insult who help the people by making them laugh.  The adminastration and congress must think that is their profession.  You get the feeling they don't they are paid to govern the nation. The media loves this.  All the so called experts will be able to buy expensive things or sent there children to a more prestieous  college.  I will thank you  on behalf of the Expert and news commentators
Jan 1, 2013 8:50AM
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So Obama wants to reinstate the marriage penalty. Happy new year.  I guess that he wants to encourage couples not to get married.  What I like most about the Democrat theory of economics is that they never let success go unpunished.  Happy New year all.
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What is the u.s history of Medicare and social security and taxes?  Could be a good read.
Dec 31, 2012 10:48PM
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this was the plan from the beginning, most were to stupid to see it. Let it all fall apart now, then allow the treasonous traitor Obama to become the savior with "tax cuts" later. Its all smoke and mirrors.
Dec 31, 2012 10:20PM
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Someone 2020......Yup that was funny..Happy New years.
Dec 31, 2012 9:59PM
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The theatrics are for the sheep. Everything is planed well ahead and acted out like a stage show to induce drama where there really is none. It makes the sheep think that their herders are actually working for their 170K a year.
But you can't fool me. I am not a sheep.


Dec 31, 2012 9:21PM
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More FAILED Leadership from Obama.

 

He's a Lazy, Stubborn, Arrogant, Corrupt (even by Chicago standards) Imbecile!   We re-elected him so I guess America wanted to go over the cliff.  We ALL wanted higher taxes, More government, More regulations, less Jobs, less opportunity and Less Prospserity.  

 

 

Dec 31, 2012 9:14PM
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This just in... Times Square will not be dropping the ball tonight as Congress has beat them to it.
Dec 31, 2012 8:00PM
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Minimum wages should be set according to minimum work provided. 
Dec 31, 2012 7:47PM
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So how much money did it cost us taxpayers to fly these inept politicians back and forth to Washington to end up with no deal?
If we were as disfunctional at our jobs as they are we would all be fired by now.
Let's vote all of them out of office and clean house.

Dec 31, 2012 7:46PM
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They agreed to create the would be cliff.  Why would they now agree to cancel it?  Everybody pay more and everybody get a little less.  Unless a recession show sign of it ugly face why would they change that?  In Reality they agree on everything that happen but who would get blame.  Politicians with principles!!!!! 
Dec 31, 2012 7:43PM
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I have always been a Republican, always voted Republican.  That is now going to change.  What has happened with the Congress is an embarassment to us as Americans.  We need to send these self-serving idiots a strong message and vote every one of them out of office.  Every voter should vote for anyone other than the incumbent.  What a bunch of selfish buffoons.  VOTE EM OUT!!!!!!!!!!

Dec 31, 2012 7:33PM
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The teabaggers getting in was the big mistake. Born of ignorance and simple-mindedness with a hankering for anarchy, they can only make things worse.

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