U.S. President Barack Obama said he was 'modestly optimistic' while making a statement on fiscal cliff negotiations following a meeting with Congressional leaders at the White House December 28, 2012.
Photographer: Getty Images
Copyright Getty Images
It's complex, dense, and filled with compromise. And the deal passed by the Senate to avert the "fiscal cliff" might not even become law, depending what actions the House takes.
Here are five things to know about the bill that passed the Senate overwhelmingly in the middle of the night.
1. No side won.
Republicans accepted higher taxes for the wealthiest Americans. Democrats accepted a higher threshold for who's wealthy enough to face a higher tax rate. President Obama broke a vow to raise tax rates on income over $250,000. And that's just for starters. See more of what's in the bill here.
2. We may have a new definition of "wealthiest Americans."
President Obama made raising tax rates on the top 2% of earners in America a centerpiece of his re-election campaign. The 2% figure includes those with income over $250,000. The Senate compromise whittles that figure down. Tax rates will only go up for individuals with income over $400,000 and families earning more than $450,000.
The deal does, however, cap some deductions for individuals making $250,000 and for married couples making $300,000. That would allow the president bragging rights to say the deal raises taxes on people at those income levels. But he said just weeks ago that capping deductions at the $250,000 level would not be enough -- and that tax rates would rise.
3. The deal "kicks the can," and three more "fiscal cliffs" are looming.
The Senate deal does not address the sequester, a series of automatic cuts in federal spending. It delays the sequester for two months In the meantime, the Senate plan calls for $12 billion in new revenue and another $12 billion in spending cuts. The spending cuts are to be split between defense and nondefense spending.
So the deal adds another battle to this year's docket of apparently inevitable congressional squabbles over money. The other two: the debt ceiling and a continuing budget resolution.
4. If it doesn't pass
Because it's now 2013, the broad series of changes brought on by the fiscal cliff are in effect. Officially, the Bush-era tax cuts across income levels have ended. If no action is taken, most Americans will pay more in taxes this year. But the timing also offers Republicans an opportunity to say they are now voting to cut taxes, rather than voting to allow some tax cuts to expire.
5. Either way, your paycheck is likely to shrink
The Senate deal does not address an increase in payroll taxes. No legislation to address the fiscal cliff is expected to. Now, the cut on those taxes has expired. Americans earning $30,000 a year will take home $50 less per month. Those earning $113,700 will lose $189.50 a month.
Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Click on the region names in the map below to see news from that region.
Things To Do
INSIDE: View our list of events happening this week around the Valley.
RIGHT NOW: Top Stories
Check out 100 of Maricopa County's mug shots of the week from December 9. All inmates are innocent until proven guilty.
Jodi Arias' sentencing phase retrial will remain in Phoenix after a judge denied a second motion from defense attorneys to move the case because of intense publicity.
A gunman has surrendered after a barricade situation at Phoenix Baptist Hospital Monday morning.
Freeze watches and warnings will kick off our week as we're expecting a few frigid mornings. Find out when we'll finally break out of this cold snap.
American Airlines has emerged from bankruptcy protection and US Airways culminated its long pursuit of a merger partner after the two completed their deal Monday to create the world's biggest airline.
The Sportsman Channel said Monday it has hired Sarah Palin to be host of a weekly outdoors-oriented program that will celebrate the "red, wild and blue" lifestyle.