Fiscal Cliff Deal Passes at Last Minute -- But Wait, What’s in It?

This Just In 10

boehnerAnd so my fellow Americans, we finally cross the fiscal cliff finish line, panting wearily with our shorts around our ankles. Late last night Congress passed the Senate's budget deal. Our middle-class tax cuts have been preserved. We will tax the rich a little bit more. And tomorrow the sun will come up same as always.

Okay, so now that the dust has settled, what have our elected officials agreed to, exactly? And which can did we just kick down the road? Here's the big picture.

More from The Stir: House Speaker Boehner Slings F-Word During Fiscal Cliff Negotiations

  • It's called the fiscal cliff "bridge," and it was largely worked out by Vice President Biden and Senate minority leader Mitch McConnell.
  • The bridge extends tax cuts for 98 percent of Americans. That means all of us with an annual household income under $450,000 for couples or individual income under $400,000.
  • Some unemployment benefits extended.
  • Stimulus tax credits for college tuition extended for five years.
  • Doctors who provide care for Medicare patients won't get a pay cut.
  • The bill adjusts the Alternative Minimum Tax for inflation.
  • The bill raises the Estate Tax on estates worth over $5 million to 40 percent.
  • The bill is expected to raise $600 billion in NEW revenue over 10 years.
  • Across-the-board cuts to entitlement programs worth $1.2 trillion are postponed until March 1.
  • The bridge is just the first stage of a full deal. By that March 1 deadline, we'll have to deal with entitlement reform, tax reform, and spending cuts.

And that's where we are. In other news, perhaps sensing our exasperation with the job they're doing, Congress voted down a raise for itself as part of the deal. But they also failed to pass the Sandy Aid bill. GUYS! What a bunch of drama queens. Here's a little comic relief for the day.

Are you surprised the bill was passed or did you think they'd agree to something by the deadline?

 

Image via Medilldc/Flickr

in the news, politics, taxes

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nonmember avatar laura

please correct what you have posted. the deal will raise taxes for individual that make MORE than $400,000 and couples over$450,000. you have UNDER written with the amounts

nonmember avatar Paul

Some of your bullet points are either incorrect or misleading. Over 99% will not see an increase in federal income tax. However, payroll taxes went up 2% and will cost about $1,000 per person. Check your numbers on cuts to entitlement programs. $1.2 trillion is not the value of cuts but estimated total cost of the programs. Also, no mention of the debt ceiling? $600 billion tax revenue increase over 10 years but we need to find $200 billion to cover 2 MONTHS to get us to March?

This is a tax bill that doesn't cut spending. Not one person, including the President, should be proud of this mess.

mande... manderspanders

Looks like it's written correctly to me: tax cuts extended for those making under $400k/$450k.

Zamaria Zamaria

I figured they'd come up with something.

Pinkmani Pinkmani

I'm glad that they were able to able to compromise. Hopefully, they will be able to compromise on other things that need to get done. The one thing that bothers me is that a lot of people have lost their jobs or taken a pay cut due to the economy, why can't our Congress take a paycut, too?

wamom223 wamom223

Pinkmani- Congress is up for a raise right now and there is a small group of Congressman that are trying to fight it (but since they are from the teaparty they are being ignored.)  Not only do I think that Congress should forfeit their raise I think they should forfeit their lifetime of annual pay.  You should get paid while you are in Congress and once you are out your pay should stop and I think that is something all Americans can agree with.  I also think that our ex-Presidents need to forfeit their lifetime pay also.  Every living ex-President is a millionaire so they don't need our money every year and it should be enough we pay for them to have Secret Service for life.  


This deal is a joke and the country should be ashamed of what their government did today.  This changed nothing and in March I wouldn't hold my breath for slashing spending when Obama is already talking about how much money he wants to spend.  We are all in for a shit storm because we are a leaderless country right now and there is nothing to be done about it.  To be honest I really hope we are able to replace our current Speaker of the House with someone that isn't so much of an asshat.

Cel7777 Cel7777

I agree with you wamom223...this was a joke. A huge dramatic hoopla that accomplished nothing.

nonmember avatar Bobbie

Non-member Paul: Since you are presenting yourself as a stickler for correctness... the phrase "worth $1.2 trillion" is ambiguous; it COULD modify (describe) the noun "cuts", but it COULD modify the noun which follows: "program"... so the statement is at least as accurate as your interpretation.

Then YOUR statement claiming "payroll taxes went up 2%" is technically false. Taxes did NOT go up 2%... taxes were increased from 4.2% to 6.2%. More accurately, the temporary tax relief expired. The two-year "stimulus" was never intended to be permanent; the Social Security system is supposed to be self-sustaining.

We could accomplish so much more in this country if we stopped the "spin". When lake levels drop in a drought, they then "return" to their base level; they "rise" only when they exceed their base level. But when taxes are cut, they "rise" when they return to their former levels. Think about it. Remember when we got those stimulus payments a few years ago (what were they called)? When the payments stopped, it was not called a tax increase. Perhaps the 6.2% rate should have been kept, with the 2% difference rebated (increasing the govt cost for processing) so that the return to the sustainable level would not be labeled a tax increase.

Your spin, alas, reveals your bias.

nonmember avatar Paul

From http://www.barackobama.com/ - "...I will sign a law that raises taxes on the wealthiest 2% of Americans..." "Under this law, more than 98% of Americans and 97% of small businesses will not see their income taxes go up. " Feel free to pick apart "raises taxes" and "go up".

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