While you were out enjoying your New Year's Eve, members of the Senate and some of our top lawmakers rang in the new year working on, and eventually passing, a deal to avert the fiscal cliff.
The Senate voted 89-8 to pass a small deal to avert the effects of tumbling over the fiscal cliff sometime around 3 a.m. in Washington last night. So, they didn't make the deadline really, but if the bill passes through the House on Tuesday or Wednesday, which it is expected to, than the country will have avoided the nasty effects of the cliff the president warned about. The deal was mostly brokered between dance partners Mitch McConnell and Joe Biden. The President was happy with it.
Here's what you need to know about the deal that got done:
- Taxes are going up for individuals who make more than $400,000 and couples who make more than $450,000. So, taxes are being raised on the top two percent of Americans just as the President promised.
- Taxes for the middle class, or people earning less than $250,000 at least, are largely protected.
- Estate taxes are rising from 35 percent to 40 percent. Democrats were hoping to take it to 45 percent. Another aspect of the deal also maintains that inherited estates of $5 million for individuals and $10 million for couples to go untaxed.
- The spending cuts for the military and domestic programs expected to come with the fiscal cliff have been delayed for two months. So we'll have to take up another battle in March, essentially.
- Federal farm policies are extended until September, averting the so-called "dairy cliff" that was going to trigger a doubling in milk prices. A win for farmers, and cereal enthusiasts, everywhere.
- A planned pay raise for Congress is cancelled.