Lawmakers are very close to reaching a deal to avoid the fiscal cliff, and stave off at least some of the tax hikes and budget cuts that are set to go into effect at midnight.
Both parties have reached an agreement on the tax part of the deal. According to reports, that includes a compromise on a $400,000/$450,000 threshold for extending the Bush tax cuts on individuals and households, respectively. The same threshold will apply to capital gains and dividends, with rates going up to 20 percent. Personal tax deductions would also be limited for high-income earners, and both sides have also agreed to a small increase on the estate tax.
The sticking point, however, is what to do about the across-the-board budget cuts that will hit the federal government tomorrow. But leaders from both parties have indicated they might just move ahead with a vote on the tax issue, and continue hammering out a deal on spending.?
Still, the agreement has angered members of both parties. Democrats have argued that President Barack Obama is giving away too much on taxes, and leaving himself open to another cave on the debt ceiling. Republicans, on the other hand, have been tweaked by the President's political grandstanding, which some have said may make it more difficult for any deal to pass the divided House of Representatives.?
Follow below for all the developments.
*This post was updated at 3:29 p.m.
4:32 PM | Now Republican aides are saying a vote could still happen...
Several House Republican aides are now saying that a vote could still happen tonight, despite Cantor's announcement. Republican sources say members are being told to stay near the Capitol in case of a last-minute fiscal cliff vote.?
While it remains unlikely that a vote will be held tonight, it's worth noting that Republican House leaders moved Sunday to give themselves expedited authority to bring a vote to the floor in the event that the Senate passes a fiscal cliff bill Monday evening.
4:28 PM | DEM DRAMA: Fox News is reporting that Harry Reid hasn't signed off on the revenue deal
Fox News reporter Chad Pergram tweets:?
4:01 PM | It's official: We're going over the cliff
House Majority Leader Eric Cantor's office just announced that no vote will be held tonight on the fiscal cliff.?
The House GOP conference will reportedly meet at 5 p.m.?
3:14 PM | Markets are surging after McConnell's announcement.
2:50 PM | MCCONNELL: "We are very, very close" to a deal
Speaking on the Senate floor, Senate Minority Leader Mitch McConnell says that both sides are "very, very close" to a deal, and that both sides have reached an agreement on the threshold for raising income taxes.?
McConnell urged the Senate to move forward with the deal on taxes, while both sides continue negotiating on a deal to cut spending and avoid the sequester.
"Let's pass the tax relief portion now," McConnell said. "Let's take what's been agreed to and keep moving."?
"We?ll continue to work on finding smarter ways to cut spending but let?s not let that hold up protecting Americans" from tax hikes, he said.?
2:28 PM | Sen. John McCain is ripping into Obama for his fiscal cliff speech.
Just minutes after Obama's remarks, McCain launched into an epic rant on the Senate floor, slamming the President for not taking the fiscal cliff seriously.
"It's time to stop the cheerleading, it's time to stop the campaigning ? the President won," McCain said, slamming his podium for emphasis. "Isn't it time to govern?"?
Obama, McCain said, "laughs and jokes and ridicules Republicans. Why?"?
"That's not the way presidents should lead!"
2:08 PM | Reports say Senate Democrats are rebelling against the deal
BuzzFeed reporter Rebecca Berg tweets that Democratic sources say liberal Senators, including Al Franken, Sherrod Brown, and others, marched into Senate Majority Leader Harry Reid's office this afternoon to voice their dissatisfaction with the deal.?
2:02 PM | Republicans aren't too pleased with Obama's political grandstanding...
Here's a tweet from Doug Heye, an aide to Republican House Majority Leader Eric Cantor:?
1:40 PM | Sen. John Cornyn, the Senate GOP's No. 2, tweets that Republicans have delayed a 2 p.m. meeting to discuss the latest cliff negotiations.
1:19 PM | REPORT: The two sides have reached an agreement on tax rates
CNBC and other news outlets are reporting that the two sides have reached an agreement on the threshold for extending the Bush tax cuts.?
Sam Stein and Ryan Grim have more details on the emerging deal here. Here are some of the key elements, according to their report:
1. The Bush-era tax cuts will be extended permanently to 39.6 percent for individuals earning more than $400,000 and households earning more than $450,000.?That same threshold would be applied for capital gains and dividends, with the top rate going up to 20 percent.?Estimated revenue: $370 billion over 10 years.?
2. ?The estate tax will go up slightly for estates over $5 million, from 35 percent to 40 percent. Estimated revenue: $25 billion in revenue over 10 years.?
3. Personal tax exemptions would be capped at $375,000 for individuals and $425,000 for households. Itemized deductions would be capped at $250,000 and $300,000 respectively. Estimated revenue: $185 billion over 10 years.?
4. A permanent patch in the alternative minimum tax (AMT) and a five-year extension of stimulus tax policies.?
The main sticking point is still what to do about the sequester. Stein and Grim report that both sides are still negotiating the cost of an extension of unemployment benefits and how to pay for a one-year resolution to postpone changes in Medicare payments to doctors.?
12:42 PM | Obama to speak at the White House at 1:30 p.m.
The White House just announced that President Obama will speak in the South Court Auditorium at 1:30 p.m.?
According to the schedule update, Obama will "deliver remarks at an event with middle class Americans," so it doesn't sound like he will be announcing a deal, although reports indicate that a deal is imminent.?
We'll be liveblogging Obama's announcement here >?
12:27 PM | There are reports a deal is emerging, but there's major Democrat drama over the sequester
The AP reports that a deal could be imminent, but that both sides are still at odds over how to deal with the sequester,?the package of dramatic budget cuts scheduled to go into effect at midnight.?
According to the AP, the deal would include returning tax rates for households earning over $450,000 to 39 percent, the same rate that they were under President Bill Clinton. The deal would also extend unemployment benefits and raise the tax on estates over $5 million from 35% to 40%.?
But Republicans are pushing for the fiscal cliff deal to include a three month delay of the sequester, and want to use the Chained CPI to offset the cuts. Democrats want to push back the sequester until 2015, and use new revenues to pay for the cuts.?
CNN reporter Dana Bash tweets that Democrats are pushing hard against Republican demands, and are now?saying they will block any bill that includes a three-month delay, part of a ploy to keep Vice President Joe Biden from agreeing to the measure.?
12:04 PM | Everyone is saying that Obama got rolled on fiscal cliff talks.
Washington Post blogger Ezra Klein has a pretty brutal takedown of the White House's leadership on the fiscal cliff. The gist of his argument is that while Obama entered the fiscal cliff negotiations with the apparent advantage, he has caved every step of the way.?
Here's the key passage:?
The Republicans plan to say that now that they broke their pledge and voted for a tax increase, they?ll insist on a dollar of spending cuts for every dollar of debt-ceiling increase ? the so-called ?Boehner rule?. The White House plans to insist that it won?t negotiate over the debt ceiling at all.
Republicans I?ve spoken to laugh at this bluster. Obama is already negotiating over the debt ceiling, they point out. He began the fiscal cliff negotiations by saying he wanted a permanent solution to the debt ceiling. Then it was a two-year increase in the debt limit. Now he?s going to sign off on a mini-deal that doesn?t increase the debt ceiling at all. Does that really sound like someone who?s going to hold firm when faced with global economic chaos? The White House always talks tough at the beginning of negotiations and then always folds at the end. Republicans are confident that the debt ceiling will be no different.
Slate blogger Matt Yglesias has a similar take here. The White House, Ygelesias argues, lost any credibility it had by putting the debt ceiling on the table despite insisting that Obama wouldn't negotiate on raising the debt limit. Even worse, by including the debt ceiling in a "grand bargain" package delayed until 2015 , the Obama White House is actually institutionalizing the practice of negotiating on the debt ceiling.?
11:23 AM | Sen. Tom Harkin (D-ID) just blasted Democrats for giving up the farm on the fiscal cliff.
Harkin, a staunch liberal, took the Senate floor after Reid, and blasted his party for making too many concessions on the fiscal cliff ? specifically by raising the threshold for extending the Bush tax cuts to $450,000, up from the $250,000 that President Barack Obama campaigned on.?
"This looks like a very bad deal."?
Harkin's sentiments have been echoed by many Democrats, who are frustrated with last night's developments. After talks failed in the Senate yesterday, fiscal cliff negotiations turned into a backroom affair between Senate Minority Leader Mitch McConnell and Vice President Joe Biden. According to reports, Biden also agreed to concede to Republican demands on the estate tax, in addition to agreeing to raise the income threshold for the Bush tax cuts.?
11:09 AM | Harry Reid: Negotiations Are Continuing As We Speak, Still Issues To Be Resolved
Senate Majority Leader Harry Reid took the floor briefly to inform lawmakers that negotiations are still ongoing, but that they don't have anything to vote on yet.?
"There are still some issues that need to be resolved before we can bring legislation to the floor," Reid said. "Negotiations are continuing as we speak."?
"We really are running out of time," he added. "Americans are threatened with a tax hike in a few hours."
11:07 AM | The Senate is back in session...
Source: http://www.businessinsider.com/fiscal-cliff-live-2012-12
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