Congress Rushes to Avoid Cliff
While the country technically went over the fiscal cliff at midnight Tuesday - any significant impact should be avoided as negotiators were able to reach a deal late Monday night that was approved by the Senate early Tuesday morning by a vote of 89 to 8. Late Tuesday night it was also approved by the House on a 257 to 167 vote. The package permanently extends current tax rates for families earning less than 450-thousand dollars a year and permanently patches the alternative minimum tax. Automatic, across-the-board spending cuts that were scheduled to start this month will be postponed for two months. The estate tax - which was set to increase from 35-percent to 55-percent - will increase to a 40-percent tax rate with a five-million dollar exemption. Capital gains and dividend tax rates for those earning less than 450-thousand are permanently extended - while rates for those earning more will increase from 15-percent to 20-percent. The measure also extends the 2008 Farm Bill for the rest of the fiscal year. Because the votes came after the December 31 deadline - the final deal will take place retroactively so tax rates continue uninterrupted for most American taxpayers.
Ahead of the vote - House Minority Whip Steny Hoyer urged his colleagues to vote not as Democrats and Republicans - but as Americans who understand that the people believe action is needed. Hoyer also expressed some regret that the plan was not big, bold and balanced. He said there was an opportunity to reach such an agreement in a bipartisan fashion - adding that a big, bold, balanced plan isn't possible without bipartisanship.
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