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Everything You Need To Know About The Emerging ‘Fiscal Cliff’ Compromise
By Travis Waldron on Dec 31, 2012 at 6:30 pm
Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden have reportedly reached an agreement that would solve the tax side of the debate over the so-called “fiscal cliff,” the package of tax increases and spending cuts that will begin automatically at midnight tonight.
Senate Majority Leader Harry Reid (D-NV) and the Democratic caucus have not yet indicated support for the compromise, which extends most of the Bush tax cuts and other tax provisions, and while the Senate may vote tonight, no vote is expected in the House before tonight’s deadline. Here is a breakdown of the different provisions of the reported compromise:
Bush tax cuts: The deal would extend all of the Bush tax cuts for incomes below $400,000 for individuals and $450,000 for families, while reinstating the Clinton-era 39.6 percent tax rate for income above those thresholds. It will also push the capital gains rate on investment income back to 20 percent for income above $400,000 for individuals and $450,000 for families. President Obama had asked for an extension of rates only for incomes below $250,000.
Stimulus tax credits: Three tax credits expanded as part of the stimulus will be extended for one year as part of the compromise. The America’s Opportunity Tax Credit, Child Tax Credit, and Earned Income Tax Credit collectively benefit nearly 20 million Americans each year, and extending them was a priority for Obama and Democrats. Republicans allowed all three to expire in tax legislation earlier this year.
Payroll tax cut: The payroll tax cut would expire as part of this compromise. The payroll tax cut, which benefits all wage-earning workers, is the most damaging piece of the “fiscal cliff” according to the Congressional Budget Office. Republicans have opposed extending the payroll tax cut in the past; many Democrats opposed its extension over fears that it would undermine Social Security, which it helps fund.
Unemployment insurance: The federal unemployment insurance program would be extended for one year under this deal. Without an extension, more than 2 million would lose benefits at the beginning of 2013, while another million would lose them in the early part of the year.
Estate tax: The estate tax was set to revert to its Clinton-era levels, where it was taxed at 55 percent after a $1 million exemption. This deal would set the exemption at $5 million and tax at a 40 percent rate after that — at a cost of $375 billion over 10 years compared to the Clinton level.
Other provisions: The deal would also include a permanent fix to the Alternative Minimum Tax and a one-year “doc fix,” which would prevent cuts in provider payments through Medicare. It also extends certain corporate tax provisions for another year.
The reported McConnell-Biden compromise does not deal with the spending cuts side of the fiscal cliff, though CNN’s Dana Bash reported that the sequester may simply be delayed for two months. The spending cuts are the part of the fiscal cliff that the Congressional Budget Office says would be the most damaging to America’s economic growth. It also does not include an increase in the debt ceiling, setting up another fight over the coming months like the one that created the fiscal cliff in the first place.
Update
The New York Times reports a tentative deal has been struck: “Senate Republicans said negotiators also agreed to put off $110 billion in across-the-board cuts to military and domestic programs for two months while broader deficit reduction talks continue.” Also the $5 million estate tax exemption will be indexed to inflation.
Update
Harry Reid and Nancy Pelosi have signed off on the deal.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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posted
I have no idea I Wish this is what the joint parties in the senate agreed upon and it would work for the president. Now we will see what the house says thats how simple it really is. An agreement is a step in the right direction. All of us can go back and forth point the finger at each other. But we are all in a mess and we have to do something if we want to go forward. No body wants to give up anything and nobody wants to pay for anything. What do you suggest? What does anybody suggest? Bearing in mind we want to use democracy.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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posted
Pretty much sums it up and I can only say I agree with you on most everything you say. There is a coming together with people out there in our country that feel that they don't count and I understand that and I also agree.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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posted
You know the old saying why do I want an attorney I have already been robbed.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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posted
i think people want an agreement form these bshtids. I don't think anyone up ther is blameless.
I look at all the money being spent on security in this country today and i ask myself who benfits? Everybody. We have to pay for these guys to stand in public places with REAL ssault rifles and full body armour and we arn't paying it, we are just putting inthe credit card:
Security in Times Square has become an obsession for the NYPD in the post-9/11 world, especially since the botched attempted car bombing there in the summer of 2010. More recently, details emerged in another case in Florida saying that one suspect considered Times Square as a potential target.
"Times Square is an iconic location that draws a significant number of people every day," Kelly said. "New Year's Eve is the apex of that, so we have to plan accordingly."
Kelly stressed that there are no specific terror threats related to a celebration televised across the globe. But believing that the so-called "Crossroads of the World" is always in the crosshairs of would-be terrorists, the nation's largest police department has turned securing the event into a science.
Hotels are a particular concern. The department has worked closely with managers, urging them to guard against anyone who might seek to check into a guest room and use it to launch a sniper or other type of attack.
"We ask them to monitor people coming into the hotels very closely," Kelly said.
In terms of crowd control, police noticed last year that revelers starting flocking to Times Square earlier in the day to hear rehearsals of performers scheduled for various telecasts.
"At one o'clock in the afternoon, there was a significant crowd," Kelly said. "It was really packed with people."
So this year, the department will adjust by posting more officers on the streets before nightfall, the commissioner said.
Along with the army of additional uniformed officers, police will use barriers to prevent overcrowding and for checkpoints to inspect vehicles, enforce a ban on alcohol and check handbags. Visitors will see bomb-sniffing dogs and heavily armed counter-terrorism teams. Rooftop patrols and NYPD helicopters will keep an eye on the crowd as well.
Other plainclothes officers are assigned to blend into the crowd. Many officers will be wearing palm-size radiation detectors designed to give off a signal if they detect evidence of a dirty bomb, an explosive intended to spread panic by creating a radioactive cloud.
The bomb squad and another unit specializing in chemical and biological threats will sweep hotels, theaters, construction sites and parking garages. They also will patrol the sprawling Times Square subway station.
The NYPD also will rely on a network of thousands of closed-circuit security cameras carpeting the roughly 1.7 square miles south of Canal Street, the subway system and parts of Midtown Manhattan.
Another annual practice: Sealing manhole covers and removing mailboxes to prevent anyone from using them to conceal an explosive or other device.
all thes esecurity people are EXPESIVE and without them the economy prolly gets hit even harder, so i'm not even saying get rid of them even tho i hate how they are having to invade our freedoms to do this job...
simply put? the terroists ARE winning this war adn that is ONLY because we are letting them destroy our economy, but we are the ones who have to make the choice to pay the bill when it comes due and not pass it on to our kids...
Osam binladen wrote amanifesto declaring it was his intent to bankrupt US and we went along with his plan in this...
even tho it is not perfect? i beleive that if theHouse doesn't pass this new bill this week? we are going into a major recsssion very fast, adn if they don't pass it? we should occupy the streets of DC till they do... i amnot "for or against the conten of the bill either, it's simply a matter of doing what is possible while it still matters, i don't think we have another month to screw around with htis, they've screwed around for years already... they are all guilty to a large degree... dems and GOP's and yes even Obama becuase he dosn't really seem to actively press the flesh on this and tlak about rela issues to eh People, he just has rally's and feel-good comments. this is hard friggin work, and it seem like everybody else is trying really hard but not the polticians..
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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posted
Ok, they passed the bill. it'll take ahwile to figure out what they have done, but it looks like we won't be crashing and burning in the next few weeks....
IF they want to take a step to actually stimulate the economy?
soembody needs to set up a new way for the people whose taxes just went up to save some taxes back and get them to put their money to work here int eh USA and not in china and other third world countris...
as far as my research can tell me? the spread on investing in say chinese factories and USA factories is only around 7-12%.... in other words? Investors do not make that much more moeny over there, but the difference is more than enough to make them do it... so how can we make it more profitable to invest here and create new state of the art factories her einstead of in China..
how about setting up special bonds similar to municipals that are tax free? that should make the spread come back favor investing int he USA, and also create more jobs which will in trun braodned and deepen the tax base....
make these good bonds make the taxes on them nothing, but make sure they are used strictly for infratructure building like breweries or steel mills and refineries of both oil and and "green fuels like biodeisel) they MUST create a faciltiy that will support 100 jobs, not a backyard stil (or like me a backyard glassblowing studio) the tax free basis needs to be for longterm gains, not just 367 days... more like a three year to get 5% and five year to get 0%....
this would divert much of the moeny fthat flows out of our country right back inot our country...
Ford Toyota? GM hyundai? they caould all get to builf facotories here and get a major tax break... oil oc's? brand spanking new refinery- also a tax shelter- cotton is bieng shipped to china and clothes are being sent back here... WE could be using our own cotton to be making and then selling clothes to China IF we built state of the art new factories here.. many of the facotries that have shut down here and moved overseas were decrpit and obsolete.... and yeah lets get rid of the tax loopholes and cut he rate to 19%... and get our spending to 18% until we are back into non-defict spending.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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I am an avid card player...definitely not a high roller by any means but I have played poker/cards fairly regularly for for about 18 years...
The other day I encountered a situation while playing that reminded me of the relationship between the political parties of our government and the "average joes" of America.
Two of my poker buddies called and wanted to play some cards at my place. These two buddies of mine are related to each other....uncle and nephew. Both are avid gamblers....the older one practically makes more money annually gambling than he does from his regular job. I have literally played with the uncle since I was 16.
I know them both well and we are "friends"..... in poker terms this means that you can tolerate each other, share laughs, eat in each others presence, consider it, but stop just short of sleeping with their wife, and be just gracious enough when they are in deep and beat but don't know it; to tell them not to call the pot when doing so would mean they are about to surrender their mortgage payment to you.....it also means that there is enough trust between you that you will hold a check on each other should one of you get in too deep.....over 18 years I have been on all sides of that explanation.
But anyway...when they called about playing I knew that I was in for Azz cutting....I knew full well that we would play and it would be them against me....I knew full well that they would agree among themselves to forgive each others losses after the game and split whatever they took off of me....
But I was intrigued for 2 reasons....one I wanted to see if I could come out on top despite being double teamed.....I didn't. Two, I thought that it would be interesting to watch how it unfolded and how they played it...that part didn't disappoint.
It was a great illustration not only to the nature of man but also an allegory for our current political system.
Like the average citizen, I knew that I was about to get screwed....and like our political parties they did a terrific job looking like adversaries while working in complete cooperation to bleed me for their mutual benefit.
-------------------- "The greatest argument against democracy is a five minute conversation with the average voter." (WC) Posts: 386 | From: Georgia | Registered: May 2009
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posted
takes alotof guts to admit that... i too will admit that i have particpated just to find out how soembody does a thing... in my learning process it was pool, and even tho i was damn good before my eyes got to be 50, i have also payed to learn a few things...
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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