In the wee first hours of 2013, the Senate passed a stop gap bill to avoid raising taxes on 99% of the American people. The House, after some posturing and in-fighting followed suit less than 24 hours into the new year. That’s not what I voted for… but it’s also not as bad as it could have been. Then again, it ain’t over yet.
This quick fix made most of the Bush tax cuts permanent (I would have preferred for five years if they had to go to $400/450K). But on the plus side, it did extend federal Unemployment Insurance for a year (how about making that one permanent?).
What else is in it?
* The tax on capital gains will be permanently set at 20 percent for those with income about the $450,000/$400/000 threshold. It will remain at 15 percent for everyone else
* The estate tax will be set at 40 percent for those at the $450,000/$400/000 threshold, with a $5 million exemption. Threshold indexed to inflation – concession to Rs and some Ds in rural areas (Max Baucus)
* Sequester will be delayed for two months; pay freeze on members of Congress will be re-imposed; the AMT will be permanently patched
* The earned income tax credit, the child tax credit and the American opportunity tax credit will be extended for five years
* A nine-month farm bill fix will be added, averting the dairy cliff – but it’s a Mitch McConnell deal that, in Sen Debbie Stabenow’s view (she’s key on this) screws farmers and ranchers: “absolutely outrageous”
For more, check out the Washington Post’s fiscal cliff cheat sheet.
There are many more questions to be raised here, including whether or not they’ll wait until midnight the night before the newly moved sequester cuts take effect before acting on a long term deal.
Also up in the air is whether President Obama meant it when he said he would not negotiation on the Debt Ceiling. Time will tell…
Still pending at this hour: Will John Boehner be shamed into reconvening the 112th Congress to pass Sandy relief legislation, or will he go down in Congress as not only the most inept Speaker of the House, but the most cruel and heartless too?