At approximately 1:57 a.m. eastern time on Tuesday morning, Jan. 1, the U.S. Senate passed legislation designed to avert a combination of automatic tax increases and budget cuts, less than two hours after the federal government had technically “gone over the fiscal cliff.”
According to a report in The New York Times, “Furious last-minute negotiations between the White House and the Senate Republican leadership on Monday secured a tentative agreement to allow tax rates to rise on affluent Americans, but not in time for Congress to meet its Dec. 31 deadline for averting automatic tax increases and spending cuts deemed a threat to the economy.
The Times article by Jonathan Weisman, published after an agreement was hammered out by Vice President Joe Biden and Senate Minority Leader Mitch McConnell, but just before the Senate vote actually occurred, reported that, “Under the agreement, tax rates would jump to 39.6 percent from 35 percent for individual incomes over $400,000 and couples over $450,000, while tax deductions and credits would start phasing out on incomes as low as $250,000, a clear win for President Obama, who campaigned on higher taxes for the wealthy.”
According to a Washington Post article by Lori Montgomery and Paul Kane, the agreement passed the Senate by a vote of 89 to 8, and, the report by Montgomery and Kaine noted, “It now heads to the House, where leaders have not guaranteed passage, but top officials believe it could win passage in the next few days.”
A report by CNN chief White House correspondent Jessica Yellin stated that “Republicans agreed to a plan that raises $620 billion in revenue over 10 years and makes a $24 billion down-payment on deficit reduction through a combination of revenue and spending cuts—also a priority for the President. Those spending cuts have been pre-determined and will be evenly divided between defense and non-defense areas.”
Yellin’s report also quotes an unnamed source who “said it was [President Barack Obama] who insisted the final deal include a pay-down on the sequester and a tax increase that hit at least individuals making $400,000 a year and $450,000 for households. That’s where the deal ended up,” she added.
What’s more, Yellin reported, “The agreement also included an individual $5 million exemption level for the estate tax, the “Doc Fix,” an agreement to extend unemployment benefits for one year, a cap in itemized deductions starting at $250,000 for individuals and $300,000 for households, and an extension in unemployment insurance.”
However, a report on MSN.com said, “It was unclear whether the legislation would prevent a 27-percent cut in fees for doctors who treat Medicare patients.”
Healthcare Informatics will continue to bring readers the latest developments in this rapidly evolving legislative story.