(Washington, DC) – President Obama will soon sign the fiscal cliff bill. In a New Year’s night vote, the Republican-led House approved a Senate bill averting a fiscal cliff of automatic tax hikes and deep, across-the-board spending cuts. The bill extends Bush-era tax cuts for households earning less than 450-thousand dollars a year. In a major victory for the President, taxes for those above 450-thousand will rise. The final House vote was 257-167. More than 150 House Republicans voted no, complaining that the bill adds to the federal debt and does not seriously address deficit reduction.
Expiring unemployment benefits for roughly two million Americans will be extended for another year. A permanent patch will be applied to the alternative minimum tax, which is set to hit middle class families. A so-called “doc fix” will be extended, ensuring that Medicare payments to doctors will not be reduced. The legislation also extends expansions of child tax credits, earned income credits and tuition credits. Meantime, Republicans won concessions from Democrats on federal estate taxes.
The payroll tax holiday expired this week and was not included in the Senate bill. The temporary two-percent tax cut was intended to help stimulate the sluggish economy. The overall legislation postpones consideration of the automatic spending cuts for a couple of months. The cuts were set in last year’s deal to raise the federal debt ceiling. The move was designed to prompt lawmakers to devise a bipartisan deal on longterm deficit reduction, a scenario that did not occur. Around the same time as consideration of the automatic spending cuts, another huge fight is expected over raising the debt ceiling again.
Copyright © 2013 Metro Networks Inc.