Jan 02 2013
Working over the New Year’s holiday, both Houses of Congress approved a deal to avert the so-called “fiscal cliff” after weeks of negotiations. A Senate vote of 89-8 was followed by a House vote less than 24 hours later of 257-167.
House Speaker John Boehner apparently considered adding billions of dollars in spending cuts to the bill before the vote, potentially derailing the compromise but in the end backed off to avert the inevitable blame Republicans would have faced for allowing taxes on a majority of Americans to increase. Unusually Boehner offered no public statement about the bill before it was voted on in the House and ended up himself voting for the bill. President Obama is expected to sign the bill today.
The details of the compromise plan involve letting Bush-era tax cuts for those making $400,000 or more a year, expire, and letting the middle class payroll tax cut of 2% which funds Social Security expire. Other tax increases on Americans making less than $250,000 a year have been averted. Unemployment benefits for over 2 million Americans have also been extended while the trigger cuts set to take place such as cuts to the Pentagon budget, have been delayed for two months. According to President Obama the deal will generate $620 billion in new tax revenues.
However in some ways, the fight is still not over. Another deal will need to be made in the next two months over the so-called sequestration cuts, and the two major parties will likely wage a big battle over once more raising the debt ceiling.
GUEST: Bryce Covert, Editor of the Roosevelt Institute’s Next New Deal Blog, contributor at the Nation and Forbes Women
Follow Bryce Covert on Twitter @BryceCovert.
Click here to read her articles in The Nation.