According to a source within the Obama administration, a deal has been reached to avoid the fiscal cliff and also delay huge spending cuts by two months
The source claimed that Democratic Majority Leader Harry Reid and the House minority leader, Democrat Nancy Pelosi had both signed off on the deal.
There may be a New Year's Eve vote by the Senate to approve the deal unless there is opposition from the Democratic majority. Top Republicans Senator Mitch McConnell and John Boehner, House Speaker had not confirmed the deal as of the time of posting this article ( Approximately 9 p.m. Central Time).
Joe Biden, the vice president, was on his way to brief Democrats. Officials who described the details did so anonymously since they were not yet authorized to discuss them. Earlier in the afternoon, Obama had announced that a deal was within sight but not yet done.
As I expected, Obama had to raise the level at which the rich lost the Bush era tax cuts from $250,000 for households to $450,000. However, many Republicans refuse to increase taxes on anyone. It will be interesting to see if the deal is able to pass the Republican-controlled House, which earlier rejected a bill that would see taxes increase only on those earning above a million a year.
Senator McConnell, Senate Republican leader, had agreed with Obama that a deal was near. He said that the Senate should move quickly to pass legislation and "continue to work on finding smarter ways to cut spending" in the new year.
Even though the deadline for a deal is midnight tonight, if a deal is passed before the new Congress takes office on January 3, there will be little inconvenience for taxpayers. No doubt the House will not vote on the deal until at least some time tomorrow.Obama warned that Republicans should not expect that the further negotiations on spending cuts will not also involve measures to increase revenues:"Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone — and you hear that sometimes coming from them ... then they've got another think coming. ... That's not how it's going to work at least as long as I'm president."
While there seems to be an agreement to raise taxes on the value of estates over $5 million, there may still be some dispute about that. The deal is expected to extend expiring benefits for 2 million who are unemployed. Also, a cut of 27% in fees for doctors treating Medicare patients will be shelved. The deal is expected to prevent the price of milk from nearly doubling as well. Other details of the agreement can be found here. However, the details will not be confirmed until later.
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