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White House, GOP reach deal on 'fiscal cliff'

By The Associated Press

This article was originally published December 31, 2012 at 8:41 a.m. Updated December 31, 2012 at 8:14 p.m.

8:15 p.m. update

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.

3:30 p.m. update

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.

11:30 a.m. update

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 requested anonymity in order to discuss the internal negotiations.

Earlier

With taxes set to increase for almost every U.S. worker at midnight, there is still no agreement yet and gaps between the two parties remain, according to people familiar with the talks who requested anonymity. Republicans and Democrats were narrowing the threshold for tax increases to between $400,000 and $500,000 in annual income.

“My sense is progress is being made,” Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, told Bloomberg Television. “It’s not a done deal. I think it’s a little better than 50 percent that we’re going to be able to avoid going over the fiscal cliff by midnight tonight.”

Talks between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell stalled Sunday because of disputes over income-tax rates, the estate tax and other issues. McConnell reached out to Vice President Joe Biden in an effort to break the impasse, while staff members worked into the night trading and reviewing offers. The two made progress, according to a person familiar with the negotiations.

Read tomorrow's Arkansas Democrat-Gazette for full details.

Comments on: White House, GOP reach deal on 'fiscal cliff'

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DoWhat says... December 31, 2012 at 4:01 p.m.

Yawn.....

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NOTAGAIN says... December 31, 2012 at 4:04 p.m.

Think I'll be puke.

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wolfman says... December 31, 2012 at 4:09 p.m.

both parties are to blame. love it how politicians can just play around. its all a game, to make the other guy look bad. the president isn't whats wrong with the country its congress!

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Smoothseaz says... December 31, 2012 at 6:29 p.m.

Duhhhhhh

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NoUserName says... December 31, 2012 at 6:57 p.m.

If people are truly sick of it, then friggin' do something. Both parties suck. Vote for the other guy. Get these bums out of DC. But no. We just elect the same bozos over and over again.

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DontDrinkDatKoolAid says... December 31, 2012 at 7:03 p.m.

Screwed.

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GottaMakeIt says... December 31, 2012 at 7:05 p.m.

To NoUserName...you must still be under the impression that OUR votes count when it comes to who wins these elections. Wisen up - we don't have a bit of clout or choice in who is our president. Don't you think WE would have done something to save America by now if we could?

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NoUserName says... December 31, 2012 at 8:48 p.m.

No, I don't. I've seen an indicted judge get 40% of the votes.

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cliffcarson says... December 31, 2012 at 11:29 p.m.

Arch Campbell County Judge of Pulaski County some many years ago, convicted of the miss-use of public funds was re-elected with 90% of the vote .

There is a very easy way to get them out. Impose your own term limits. There is no law that says you have to vote for anyone running for a second, or third term. So don't do it. It's that easy.

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TheBatt says... January 1, 2013 at 12:40 a.m.

So- there will be a glass wall against hard work and bettering one's self, and building up small businesses.

A couple who owns a business will no want to grow if it means crossing the $450k threshold, as the government will take a significantly larger chunk of their total income.

So- basically what it means--- if you make $449,999- you take home more than I you make $450,000. Significantly more.

I still don't understand how this is "fair"-- and keep in mind that I have total income and benefits that total less than 10% of that threshold... And I still don't understand why so many pay nothing- but they deem it fair to take an ever-larger bite from those who do pay.

I know far too many people who draw a check from the government every month, who then "file their taxes", and get a huge "refund"... How do you get a refund if what you never paid in?

I know a woman who has several children, has never held down a job, never been married, has several children, and draws nearly $5k in checks from the government. She is not disabled in any way (other than motivation to work). She also gets $thousands at tax time... And lives in government-paid housing. Never paid a penny in taxes.

All while the a dual taxpayers conti is to work for the government...

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