President Barack Obama has signed a bill that boosts taxes on the wealthiest Americans, while preserving tax cuts for most American households.
The bill, which averts a looming fiscal cliff that had threatened to plunge the nation back into recession, also extends expiring jobless benefits, prevents cuts in Medicare reimbursements to doctors and delays for two months billions of dollars in across-the-board spending cuts in defense and domestic programs.
The GOP-run House approved the measure by a 257-167 vote late Tuesday, nearly 24 hours after the Democratic-led Senate passed it 89-8.
Obama, who is vacationing in Hawaii, signed the bill using an autopen, a mechanical device that copies his signature.
Legislation to block the "fiscal cliff" is headed to the White House for President Barack Obama's signature. The bill will avoid, for now, the major tax increases and government spending cuts that had been scheduled to take effect with the new year.
Final approval came in the House on New Year's Night. The vote was 257 to 167.
The Senate passed the bill less than 24 hours earlier.
The measure raises tax rates on incomes over $400,000 for individuals and $450,000 for couples, a victory for Obama.
It also extends expiring unemployment benefits for the long-term jobless, prevents a cut in fees for doctors who treat Medicare patients and cancels a $900 pay increase due to lawmakers in March.
Another provision is designed to prevent a spike in milk prices.
Republicans are dropping their demands for additional spending cuts and will hold a House vote on whether to give final congressional approval to the Senate-approved compromise averting "fiscal cliff" tax increases and spending cuts.
The House vote was expected Tuesday evening.
A decision by the Republican-run House to amend the Senate-passed bill would have complicated prospects for final congressional passage of the measure. Senate Democratic aides have said the Democratic-led Senate, which overwhelmingly approved the compromise early Tuesday, would not return to vote on an amended version of the measure.
The measure would allow tax increases on the highest-earning Americans, but retain decade-old income tax cuts for everyone else.
On New Year's Day, the White House released a statement from President Obama regarding the Senate's vote for a fiscal cliff deal overnight:
"Leaders from both parties in the Senate came together to reach an agreement that passed with overwhelming bipartisan support today that protects 98 percent of Americans and 97 percent of small business owners from a middle class tax hike. While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay.
This agreement will also grow the economy and shrink our deficits in a balanced way – by investing in our middle class, and by asking the wealthy to pay a little more.
What's more, today's agreement builds on previous efforts to reduce our deficits. Last year, I worked with Democrats and Republicans to cut spending by more than $1 trillion. Tonight’s agreement does even more by asking millionaires and billionaires to begin to pay their fair share for the first time in twenty years. As promised, that increase will be immediate, and it will be permanent.
There’s more work to do to reduce our deficits, and I’m willing to do it. But tonight’s agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans. And as we address our ongoing fiscal challenges, I will continue to fight every day on behalf of the middle class and all those fighting to get into the middle class to forge an economy that grows from the middle out, not from the top down."
The Senate has passed legislation to block the impact of across-the-board tax increases and spending cuts that make up the fiscal cliff.
The vote was an overwhelming 89-8 and came well after midnight on New Year's Day.
A House vote is expected before Wednesday.
The White House-backed legislation would prevent middle-class taxes from rising, and raise rates on incomes over $400,000 for individuals and $450,000 for couples.
It also blocks spending cuts for two months, extends unemployment benefits for the long-term jobless, prevents a 27 percent cut in fees for doctors who treat Medicare patients and prevents a spike in milk prices.
A last-minute addition would also prevent a $900 pay raise for members of Congress from taking effect in March.
Republican Senator Richard Burr issued this statement on the vote:
“While the deal we voted on tonight was far from perfect and not as comprehensive as I had hoped, I supported this proposal because it protects 99% of Americans from increased taxes, it provides permanent certainty on the estate tax and Alternative Minimum Tax, it provides one year of protection for the reimbursement of doctors, it extends unemployment insurance for one year, and the net result of the deal provides over $600 billion that should be used to pay down our national debt.”
Democratic Senator Kay Hagan issued this statement on the vote:
“While I believe it is unacceptable that Washington has once again waited until the eleventh hour to find a solution, and though I would have preferred a comprehensive, balanced solution to avert the fiscal cliff and begin reducing the deficit, I voted for the plan put forth tonight so that we can stop a tax hike on middle class families in North Carolina. The average family in our state will see their taxes increase by $2,200 without this action.
“We still have issues surrounding the fiscal cliff that we must resolve, including the defense cuts that will have an outsized impact in North Carolina and our skyrocketing federal debt. The challenges we face may be complex, but working together should not be this hard, and I will continue urging my colleagues on both sides of the aisle and both sides of the Capitol to come together to work on a commonsense solution."
A Democratic aide says the White House and congressional Republicans have reached an agreement to avert the so-called fiscal cliff.
The measure would extend Bush-era tax cuts for family incomes below $450,000 and briefly avert across-the-board spending cuts set to strike the Pentagon and domestic agencies this week.
Vice President Joe Biden was set to sell the agreement to Senate Democrats at a meeting at the Capitol on Monday night.
The aide required anonymity because he wasn't authorized to speak publicly.
The House will miss the midnight Monday deadline lawmakers set for voting to avoid the "fiscal cliff."
House Republicans notified lawmakers that the chamber will vote Monday evening on other bills. They say that will be their only votes of the day.
President Barack Obama and Senate Republican leader Mitch McConnell said Monday they are near a deal to avoid wide-ranging tax increases and spending cuts -- the fiscal cliff -- that take effect with the new year.
Both men said they were still bargaining over whether -- and how -- to avoid $109 billion in cuts to defense and domestic programs that take effect on Wednesday.
It remained unclear whether the Senate would vote Monday.
Congress could pass later legislation retroactively blocking the tax hikes and spending cuts.
(Copyright 2012 by The Associated Press. All Rights Reserved.)
WASHINGTON (AP) -- President Barack Obama says it appears that an agreement to avoid the fiscal cliff is "in sight," but says it's not yet complete and work continues.
Obama says this has been a "pressing issue on people's minds," and tells an audience of middle-class taxpayers the deal would, among other things, extend unemployment benefits for Americans "who are still out there looking for a job."
He voiced regret that the work of the administration and lawmakers on Capitol Hill won't produce a "grand bargain" on tax-and-spend issues, but said that "with this Congress, it couldn't happen at that time."
Officials familiar with the negotiations say an agreement would raise tax rates on family income over $450,000 a year and increase the estate tax rate. .
The contours of a deal to avert the `fiscal cliff' are emerging that would raise tax rates on couples making over $450,000 a year, raise the estate tax rate and extend unemployment benefits for one year.
That's according to officials familiar with the negotiations.
The deal in the works would return tax rates on families making over $450,000 to 39.6 percent. The tax on estates worth more than $5 million would increase to 40 percent. And unemployment benefits would continue for one year.
The officials say the White House and Republicans are at an impasse over what to do about automatic, across-the-board spending cuts set to begin taking effect on Jan. 1. Democrats want to put off the cuts for one year.
The officials requested anonymity in order to discuss the internal negotiations.
(Copyright 2012 by The Associated Press. All Rights Reserved.)
Democrats and Republicans say signs of progress are emerging in urgent negotiations to avert the looming `fiscal cliff' ahead of a midnight deadline.
A person familiar with the negotiations says Democrats have offered to extend tax cuts for families making up to $450,000 a year and individuals making up to $400,000. President Barack Obama originally wanted the tax cuts to be extended only for families making up to $250,000 a year.
Unless an agreement is reached and approved by Congress by the start of New Year's Day, more than $500 billion in 2013 tax increases will begin to take effect and $109 billion will be carved from defense and domestic programs
The person familiar with the talks requested anonymity in order to discuss the internal negotiations.
Taxes on the wealthy and Republican demands for budget cuts to pay for Democratic spending proposals were separating the two parties as the deadline for avoiding the "fiscal cliff" has drawn to within hours.
Senate Minority Leader Mitch McConnell spoke late Sunday with Vice President Joe Biden, a former Senate colleague, in hopes of settling remaining differences. That followed weekend bargaining between McConnell and Senate Majority Leader Harry Reid that left several issues unresolved.
Unless an agreement is reached and approved by Congress by midnight tonight, more than $500 billion in 2013 tax increases will begin to take effect and more than $100 billion will be carved from defense and domestic programs. Economists warn that the combined impact -- the so-called fiscal cliff -- could rekindle recession.
After three weeks of gridlock, there appears to be some optimism that lawmakers can reach an agreement to avert across-the-board tax hikes and spending cuts due to go into effect next week.
After a meeting Friday with House and Senate leaders, President Barack Obama said he's optimistic. That same sentiment is shared by Senate's Republican leader, Mitch McConnell.
Majority Leader Harry Reid says he'll do everything he can to prevent tax increases and spending cuts but cautioned that any agreement will likely be "imperfect."
Under a timetable sketched by congressional aides, any agreement would first go to the Senate for a vote. The House would then be asked to vote, possibly as late as Jan. 2, the final full day before a new Congress takes office.
Officials said there was a general understanding that any agreement would block scheduled income tax increases for middle class earners while letting rates rise at upper income levels.
In addition, Obama and Democrats want to prevent the expiration of unemployment benefits for about 2 million long-term jobless Americans.