12:20 a.m., Jan. 2
At about 11 p.m., the House officially approved the fiscal cliff bill, avoiding potential major economic disasters for the U.S., some experts said.
The bill passed 257-167 and will head to President Barack Obama who said late Tuesday that he plans to sign the bill.
Republican party leaders had formerly expressed concern with certain portions of the bill. During earlier discussions, House members considered tacking on amendments to the Senate-approved bill, including an additional $300 billion in spending cuts.
But because the Senate adjourned until Wednesday, the House chose not to make any amendments to the bill in fear the Senate would not have time to review the changes before Thursday when the next Congress will be sworn in.
Obama emphasized the importance of collaboration between the parties “with a little bit less drama” to help reduce the deficit, among other goals, such as generating jobs, increasing income and addressing climate change and gun violence.
“It’s an obligation to ourselves and to future generations,” he said. “I look forward to working with every single member of Congress to meet this obligation in the new year.”
3:55 p.m., Jan. 1
The Senate reached an agreement and passed a bill that could help most Americans avoid thousands in tax hikes just after the New Year began.
The deal reinstates cuts that expired at midnight that would preserve tax cuts for individuals with incomes less than $400,000 and couples with incomes less than $450,000.
By taxing the wealthiest 2 percent of Americans, according to a White House press release, the bill will raise $620 billion in revenue and prevent tax increases for 98 percent of families and 97 percent of small businesses.
Other elements of the bill include a five-year tax break extension for families paying for college and businesses pursuing renewable energy. The bill will also extend unemployment insurance for 2 million people for a year and avert a steep rise in the price of milk in the first few months of 2013 by extending the farm bill.
As for the series of automatic federal spending cuts scheduled to take effect Wednesday, the Senate-passed package postponed dealing with the “sequester” until February. These cuts would have most program’s budgets anywhere from 8 to 10 percent. The bill also does not address the debt ceiling.
The bill now faces the Republican-controlled House.
9:00 p.m., Dec. 31
As most Americans prepare to countdown to a New Year, the president and Congress have been working on a solution to avoid the fiscal cliff but won’t be passing any legislation before midnight.
With the fiscal cliff and possible tax increases for 98 percent of middle-class Americans looming ever closer, President Barack Obama said this morning that a solution is “within sight” but the House of Representatives will not vote on proposed solutions this evening, party leaders told CNN.
Throughout the last month, Obama and Congress have been working on a solution to avoid the economic crisis that will take effect at midnight if no solution is found. A 2 percent tax increase for workers and spending cuts implemented by the 2011 debt ceiling deal will likely worsen the already weakened economy.
Congress currently is discussing an agreement that would not only prevent tax increases for middle-class families, but extend tuition tax credit to help families pay for college.
Additionally, the proposed solution would extend tax credits for families with children and clean energy companies, and extend insurance for 2 million unemployed Americans still seeking jobs.
“The last thing folks like the folks up here on this stage can afford right now is to pay an extra $2,000 in taxes next year,” Obama said during a speech this afternoon at the White House. “Middle-class families can’t afford it. Businesses can’t afford it. Our economy can’t afford it.”
Obama noted the White House began efforts to reduce the deficit by cutting $1 trillion in spending last year and now plans to further diminish the deficit by billions of dollars by implementing higher taxes for the wealthiest 2 percent of Americans, which Republicans formerly opposed. He also suggested finding new ways to pay Medicare bills and reducing the cost of health care.
But talks still are underway, and the president said he plans to spend New Year’s Eve working on a solution.
“Democrats and Republicans in Congress have to get this done,” he said. “But they’re not there yet. They are close, but they’re not there yet.”