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Highlights of the Fiscal Cliff Deal

A summary of the deal reached as the House approves the Senate-passed package in a late-night vote of 257 to 167.

In the wee hours of January 1, 2013, Senate leaders reached agreement on legislation designed to avert the so-called "fiscal cliff." That agreement has now been approved by the House by a 257 to 167 vote.

According to The Washington Post the measure "would let the top tax rate rise immediately from 35 percent to 39.6 percent on income over $450,000 for married couples and $400,000 for single people."

Although the bill passed will protect middle income families from an increase in income taxes, the legislation passed Tuesday night will not stave off an increase in payroll taxes. A 2 percent payroll tax cut passed during the economic downturn expired Dec. 31.

According to Bloomberg the average increase would be $1,635. The increase will impact approximately 80 percent of households with incomes between $50,000 and $200,000, Bloomberg reported.

The Senate had previously passed the package by an 89-9 vote. While both of Georgia's Republican senators - Saxby Chambliss and Johnny Isakson - voted for the bill, each of the state's eight GOP congressmen voted against it when it was sent to the House.

Of Georgia's five Democratic congressmen, three voted yes, while Rep. John Lewis did not vote as he returned to Atlanta following the passing of his wife, Lillian, on Monday

Some highlights of the so-called McConnell-Biden plan:

  • The payroll tax rate, which is used to fund Social Security, will rise to 6.2 percent from 4.2 percent. For a worker making $30,000 annually, that would mean about $50 less monthly in take-home pay.
  • Extends tax cuts in the 2009 stimulus act for five years, including a child tax credit, and an expanded earned income credit.
  • Federal unemployment insurance would be extended for a year for 2 million people.

The entire Senate bill can be reviewed here.

The New York Times reported that the debt limit was not part of the deal. The country officially hit its debt limit Monday, and the Treasury reportedly is undertaking “extraordinary measures” to put off default.

- Patch contributor Alex Keown contributed to this story

Tom Ness January 02, 2013 at 06:31 PM
It is actually around 600 billion. What the CBO takes into account is that there is not going to be a AMT tax patch each year. That is the reason congress only does one year patches each year so the deficit does not look so bad. This year congress did a permanent patch, which reflects the CBO showing that high trillion dollar number. Those numbers should have never existed, AMT should not have to have been patched. Regardless the government and all it's waste on the federal level need to get balanced.
Mona Taplin January 03, 2013 at 04:49 AM
I hope we have a choice of new people to vote for next election so we can vote out every incumbant in both the Democrat and Republican parties. There is not one single good excuse why compromises could not be made long ago instead of waiting till the last possible minute. RW Cook, you are right. Not one single thing has been done to reduce the out of control spending. This country cannot continue down this same path.
RWCook January 03, 2013 at 05:30 PM
It's not us they are looking out for... http://online.wsj.com/article/SB10001424127887323320404578216583921471560.html?mod=hp_opinion
Nick January 03, 2013 at 06:39 PM
And there you have why these guys waited long after the election to haggle over this. In another 6 months we will forget all of this and by election time, the board is cleaned off. We get too busy into our daily grind that the politicians that be take great advantage of this. I mean who's watching Measure U in Newark, are the funds really going where they should, geez, seems we've lost a street sweeper given the amount of leaves on the streets these days, city hall is still closed every other Friday. And that tree that toppled onto Cedar, does the city have a program to monitor trees that may fall. Sure their insurance can cover damages, but can they replace a life?
Mona Taplin January 03, 2013 at 08:23 PM
Nick, ANY tree can fall when the ground gets that saturated. Lawn service workers did a good job cleaning leaves out of our yards and streets within the past couple of days and the street sweepers came by very recently, but the trees refuse to cooperate and sent out bushels more in the wind. We can all accept a little responsibility and clean up the street in front of our own homes. If the city had to do it all they would have to send a sweeper about once an hour to every street to keep up. You can check up on Measure U by going to Council meetings, and/or reading the minutes of the meetings on line. One of the main reasons we continue to put up with these things is because lots of people complain but refuse to run for office, or to support financially promising new comers who seek political office. That's an extremely expensive undertaking, even for local offices.

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