Hours after the ball dropped and the automatic spending cuts and tax hikes took effect, the U.S. Senates reached a bipartisan deal with an overwhelming majority passing the torch to the House to pass the deal today on Tuesday.
The vote came early Tuesday in Washington after the U.S. technically went over the cliff! The Senate voted on the deal hammered out by Vice President Joe Biden and Republican Senate Minority Leader Mitch McConnell about 2 AM EST after the clock stuck midnight activating about $600 billion of random spending cuts and wide-range tax increase.
The deal passed the Senate with an overwhelming majority of 89-8, which makes permanent tax cuts for most middle class households and extend unemployment benefits, key facts to withhold the U.S. economy recovery and unwind the harsh impact of the cliff.
The Deal is
The bill includes both spending cuts and tax increases. The agreement extends tax cuts on incomes up to $400,000 for individuals and $450,000 for couples. Those earning above that would be taxed at a rate of 39.6 percent, up from 35 percent which still remains above President Obama’s preferred $250,000 threshold.
Jobless benefits will be extended for the long-term unemployed for one more year and tax breaks for low-income families would be continued; while on the other end the spending cuts include 50% from defense and 50% from non-defense areas according to sources.
Estates deal was a split between the two parties and would have a top rate of 40 percent with the exemption on the first $5 million for individual estates and the first $10 million for family estates.
The House Set to Vote
Pressure is now on House Speaker John Boehner who still did not say if he will accept or amend the bill. The expectations are not clear for the bill at the House with an overwhelming Republican majority. A vote could come as early as New Year`s Day. The House is scheduled to convene at noon.
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