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U.S. Senate Passes 'Fiscal Cliff' Bill, It's Now up to The House to Pass or Reject The Deal
December 31, 2012
Happy New Year (again)!
A pleased-looking Sen. Mitch McConnell (Courtesy the New York Times)
With just hours to go before the Jan 1. deadline, the White House and Senate Republicans have reportedly reached a deal to avert the so-called "fiscal cliff."
Breaking: White House official says fiscal cliff deal is reached.on.wsj.com/ShHjC6— Wall Street Journal (@WSJ) January 1, 2013
Republican leadership has already "okay'd" the deal and Rep. Nancy Pelosi (D-Calif.) and Sen. Harry Reid (D-Nev.) have allegedly signed off on it.
Reid = Yes. McConnell = Yes. Pelosi = Yes Boehner/Cantor/McCarthy = ?The whole ballgame. Welcome 2013. #fiscalcliff— Major Garrett(@MajorCBS) January 1, 2013
The deal would extend Bush-era tax cuts for family incomes below $450,000, according to the Associated Press.
What I hear: In final deal, traditional IRA accts will be encouraged to transfer to Roth. Dems won't love, but generates short term rev— Robert Costa (@robertcostaNRO) January 1, 2013
"Income taxes go up for individuals making over $400K," writes ABC News' Jonathan Karl, "40% Estate tax kicks in at $5 million, indexed for inflation."
"Tax rates on cap gains and dividends go to 20 percent -- permanently," he adds.
Another part of the deal involves delaying the automatic spending cuts that were scheduled to take effect on Jan. 1.
"Two month delay in the fiscal cliff spending cuts intended to give Congress more time for more comprehensive measure," reports CBS News' Mark Knoller.
However, it should be noted that postponing the automatic spending cuts (i.e. the "sequestration") for two months means that they will come up again for debate just as we again turn our attention to the debt ceiling.
"The US debt will now remain unchanged until the next 'deal' since debt ceiling was just breached," writers at Zero Hedge note.
Also, this from National Review's Robert Costa:
So: 1 month of 2 month sequester delay is paid for by this IRA change. Short term volntry transfer IRA tax leads to less gov rev longterm.— Robert Costa (@robertcostaNRO) January 1, 2013
Vice President Joe Biden headed to Capitol Hill late Monday to meet with Senate Democrats and sell the plan. After arriving at the Capitol, Biden and Sen. Reid ignored reporters' shouted questions about whether a deal had been reached, Biden responding only, "Happy New Year."
GOP leaders are reportedly confident that the deal with pass in both chambers by wide margins.
But there are some things to keep in mind. First, although it seems that leaders in both parties are on board with the deal, it's unclear whether the "legislative language for [a] 'cliff' deal will be ready for Senate vote tonight or tomorrow," Knoller notes.
Second, even if the bill is approved the Senate (which it probably will be), the House is another matter. Many GOP members object to the income, estate, and capital gains tax increases.
UPDATE(S): Is the deal in jeopardy?
Hearing House GOP will en masse vote against deal... Meaning @speakerboehner would need Democrat votes to pass it— Matthew Boyle (@mboyle1) January 1, 2013
I hear Boehner is unhappy with the deal. Not sure he can sell. Not sure how conf. will respond, per Senate sources familiar w/ the talks.— Robert Costa (@robertcostaNRO) January 1, 2013
Speaker Boehner is reportedly nervous about how he will frame the deal so as to sell it to his caucus. But at least Rep. Pelosi feels comfortable with the deal:
When a final agreement is reached and passed by the Senate, I will present it to the House Democratic Caucus. #FiscalCliff— Nancy Pelosi (@NancyPelosi) January 1, 2013
And a little something else to consider:
Even with the fiscal cliff deal, Americans earning $50k/yr will pay $1,000 more in taxes in 2013 b/c of expiration of payroll tax cut.— Zeke Miller (@ZekeJMiller) January 1, 2013
UPDATE II: Hmmmm ...
Good news. In deal we will STOPany pay increase for Congress. Thank goodness. Good reason to vote for it.— Claire McCaskill (@clairecmc) January 1, 2013
You know what this means, right? It means that by attaching congressional pay to the bill, its architects have successfully put the fiscally-minded members of Congress in a position where a vote against the deal is a vote to increase their salaries. It's a tricky situation, to say the least.
UPDATE III: The Senate will vote tonight on the deal as soon as the Congressional Budget Office is finished scoring it, said Sen. Harry Reid.
"Nobody in senate dem meeting said they would be against it," writes NBC News' Chuck Todd. "There's no liberal revolt. Senate GOP may lose less than 10. Could get 80+ votes."
We hope for the sake of congressional leaders that someone told the CBO to say on call:
But seriously, what is the deal with the night-desk at the CBO? Are there just always folks there on call?— Joseph Weisenthal (@TheStalwart) January 1, 2013
And in case you were wondering about that whole "dairy cliff" thing:
Sen. Debbie Stabenow says #fiscalcliff deal includes partial 9-month extension of farm bill that will make sure milk prices don't double.— Jill Jackson (@jacksonjk) January 1, 2013
Lastly:
As 2013 nears, Biden woos Dems. McConnell has his caucus on board. The race to a deal is over. Forget the clock. This thing will pass Senate— Robert Costa (@robertcostaNRO) January 1, 2013
If this is the case, and all that's needed is for Boehner to get enough Republicans to vote on a House version of the Senate bill, then we have a deal. However, although the Speaker says the House will "honor its commitment to consider the [bill]" if it is passed by the Senate, he stressed that its passage is contingent upon a House review of the Senate deal.
"[U]ntil House reviews the Senate bill," Knoller reports, "[Boehner] can't say if House will accept it or return it with amendments."
UPDATE IV: Well, it's midnight and there has been no vote in the Senate. So there's that. We've officially fallen off the so-called "fiscal cliff."
Sr Senate source says they are still writing the #fiscalcliff bill. So timing for a vote is unclear.— Chad Pergram (@ChadPergram) January 1, 2013
And this from the AP's Andrew Taylor:
Am told CBO score is not coming anytime soon. Senate may vote without one. #helluvawaytorunarailroad— Andrew Taylor (@APAndrewTaylor) January 1, 2013
According to Fox News' Ed Henry, the CBO reports that the Senate deal contains $620 billion in new tax hikes and only $15 billion in spending cuts. Do the math on that one.
Where we stand now (12:45 a.m. ET): Congress missed the deadline (sending us over the "fiscal cliff" [for now]), new tax hikes grossly outweigh spending cuts, early reports indicate the Senate bill might not make it through the House, and they only managed to put off the "sequester" for two months.
UPDATE V: Legislatively speaking, we'renot over the "fiscal cliff" yet. You see, as BuzzFeed's D.C. bureau chief John Stanton reminds us, because the Senate didn't gavel out yesterday, it's still technically Sunday for U.S. lawmakers. So,technically, they haven't missed the "cliff" deadline.
Fun, right?
Oh, also, for those of you who are still awake, reports are coming in that the Senate will vote on the bill at around 1:40 a.m. ET.
UPDATE VI: The Senate reconvenes for a vote.
The U.S. Senate at 1:58 a.m. ET passed by a vote of 89-8 the "American Taxpayer Relief Act of 2012." It's now up to the House to review the bill and see if they agree with it.
Among the senators who voted against the bill were Sens. Marco Rubio (R-Fla.), Rand Paul (R-Ky.), Chuck Grassley (R-Iowa), Richard Shelby (R-Ala.), Mike Lee (R-Utah), Mike Bennet (D-Colo.), Ben Cardin (D-Md.), and Tom Harkin (D-Ia.).
Surprisingly enough, Sens. Jeff Session (R-Ala.) and Tom Coburn (R-Okla.) voted in favor of the deal.
Final Thought -- Considering the fact that U.S. lawmakers spent most of the day locked up in the Capitol Building haggling over the "American Taxpayer Relief Act of 2012,” it's almost certain none of them actually read the bill.
This is getting to be a really bad habit.
Follow Becket Adams (@BecketAdams) on Twitter
Featured image courtesy Getty Images. This post has been updated ... a lot.
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