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.
RIGHT NOW: Top Stories
Tornadoes destroyed homes and tossed trees around like toothpicks as powerful storms ripped through Oklahoma and the Midwest on Sunday and Monday.
Television reports showed houses and buildings in the Oklahoma City suburbs reduced to fragments and others on fire.
TornadoAlleyLIVE.com is the Internet's first-of-its-kind total immersive, interactive experience.
A tornado touched down Monday afternoon near Oklahoma City, leaving behind severe damage.
While Jesus Cabrera Molina has not yet been charged in the death of Officer Daryl Raetz, he is in custody on separate drug charges, paperwork shows.
Complaining that Jodi Arias' sensational murder case has become a modern-day "witch trial," her lawyers tried to quit in the middle of the death-penalty phase Monday, then said they will call only one witness: Arias.