Washington (CNN) – A deal was reached between Congressional leaders and the White House late Monday night, according to a Democratic source.
The agreement brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell was later signed off on by House Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid during calls with President Barack Obama, said a source familiar with the deal.
The same source said the plan postpones the sequester by two months, half paid for through tax revenue and half paid for through spending cuts. Half of the spending cuts stems from defense spending and half from non-defense spending.
The individual $5 million exemption level for the estate tax, an element supported by Republicans, will remain. But that cap is indexed to inflation, meaning it will increase every year, according to the same source, an element incorporated at the insistence of moderate Democrats.
Additionally, the “Doc Fix,” payments to doctors who take Medicare patients that the GOP wanted, will continue but will not be paid for by the Affordable Care Act.
The tentative agreement also includes a one year extension of unemployment benefits and will allow income taxes for individuals making $400,000 a year and households making $450,000 to return to the Clinton-era rate of 39.6%.
The deal resolves other outstanding sticking points by including an extension in tax credits for child care and tuition. It also caps itemized deductions, starting at a threshold of $250,000 for individuals and $300,000 for households.
What about the Alternative Minimum Tax? Did they fix that before the end of the year so that nearly everyone doesn't get hit with a tax bill?
So now the wealthy will pay almost 40% (that's right, 40%!) of the federal income taxes in this country, while the lower middle class and poor pay less than 2%.
Thank you, Comrade Obama, for turning us into a socialist nation through income redistribution.
Now that you've done your meaningless show, please attack the real problem, which is 4 straight years of OBAMA TRILLION DOLLAR PLUS DEFICITS caused by wreckless spending.
Up till now, only federal employees have done far more than their fair share in reducing the budget deficit. Now it's time for the other 300+ million Americans, particularly the middle and lower class, to do theirs!!
i hope and pray that cnn is listing.
This circus reminds me of when I first taught my little brother how to play chess. He absolutely would not concede to checkmate until he stared at the board for 20 minutes. I could only laugh and sympathize with his helpless, stubborn refusal to accept defeat.
GOP, this deal was done November 6th. Welcome to reality...
What about the AMT?
It's a pathetic shame that McConnell just couldn't stand to forge a handshake deal with the POTUS. Same freakin' terms! The silly political posturing is nauseating.
I hope Congress can work together and with the president from now on and do whats best for country the greast nation on earth!GOD BLESS AMERICA
Raise taxes. Don't reduce spending. Complain that we didn't raise taxes on enough of the rich or by enough of a rate. Those are the details.
No spending cuts = no deal. And people will blame the house of representatives for fiscal sanity.
Yes as William Shakespeare said all those centuries ago, "Much ado about nothing..."
Soooooooo nothing was done in three months of talks.......bravo, another win for congress.
So.. Who didn't see an 11th hour agreement coming? I swear, government is becoming like reality TV. It's all for the drama.
Well we aren't screwed yet for another couple months. Now they will push for communist Russia gun infringments.
39.6% is absurd, I don't care how much money you make (and let's be clear, I don't make near that amount of money)
39.6% would be bad enough if it stopped there, but that is just federal income tax. Include social security witholdings (which my generation will porbably never see again), pay roll tax, state income and/or sales tax, local property tax... you're looking at the government taking well in excess of half of what some people make. That is absurb, I don't care if you mak 20 gazillion dollars...
this is great news – BUT – What will Boehners' mutineers do? My guess is that the Tea Party renegades will not support it, which I actually hope happens, because it might give the GOP a good enough gumption to disavow them. But, since the House's idea of a stopwatch is a calendar, get out your toboggans because we're going to be sliding over the edge of the cliff tomorrow.
The whole thing has been a dog and poney show. The tax increases are inconsequential and likely don't even cover the extended tax credits and unemployment payments. The real tough decisions regarding spending cuts were, as usual, merely kicked down the road. Its past time for our government to get serious about raising revenue and cutting spending
Glad obama let biden handle it. seems like obama was trying to ruin it with that silly campaign like speech earlier today. i m a liberal but that wasn t needed. he does t have to keep to keep saying he s gonna be prez for the next 4 years when will these politicians grow up
Whatever they came up with, is ill-gotten and will breed further contempt and be only a temporal "solution" much like a young person cramming before a crucial exam
"Doc Fix"..."will not be paid for by the Affordable Care Act". So the health care law won't be paying for the health care? Is that just to make it look better on paper or what? Where's the money coming from then?
I'll believe it when it happens. It sounds too much like a posturing game by both sides for the benefit of the electorate. This was not suspenseful but torturous.
Screw the Congress and their fabricated "fiscal cliff" crap!
Most of us just want to ring in the new year. Let's stop letting them hold us hostage, and get on with our own little lives.
They are so arrogant to try to make themselves matter during the holiday season.
$450,000 income threshold, and $5,000,000 exemption from estate taxes?
Sounds like another trademark Obama cave job.
The GOP really do continue to play him like a puppet.
Let's see – GOP agrees to Dem demand to raise taxes. Dems do not agree to ANY GOP demands for expenditure cuts. Yup! I can see that the GOP is the pary of No and will never compromise, unlike the Dems. But then Dems don't let little things like facts impact their opinions!
This entire fiasco is an embarrassment brought on by the do-nothing members of Congress, especially the obstructionist Republicans in the house. First, they wanted to make sure Obama would be a one-term president. Now they're saying they want to bring him to his knees. What a bunch of arrogant and repugnant creeps! They are only interested in their own powerful positions instead of the good of the citizens for whom they're supposed to work. You know, the ones who pay their salaries, permanent medical benefits, and obscene pensions whether they served for 2 years or 30 years. They got theirs, and the rest of us can go you-know-where.
Folks, it's easy to see that those at the BOTTOM of the system need to start contributing by at least eliminating lifetime payments of welfare, food stamps, public housing, tax CREDITS when they didn't even work, Obamacare if they don't pay their share, etc. A time limit for these needs to be in place even more so than unemployment. Everyone, I repeat, everyone below retirement age and not DISABLED needs to contribute if this country is going to make it.