With the midnight Dec. 31 deadline for the US fiscal cliff fast approaching, Democrat and Republican lawmakers have yet to reach a deal that would stave off the tax hikes and dramatic spending cuts due to go into effect.
The Washington Post reports that Democrats have softened their stances on taxes, agreeing to tax hikes on family earnings over $450,000 rather than President Barack Obama’s campaign trail proposal of a $250,000 level. Democrats have also committed to keeping estate taxes at their current low levels. Republicans are still pushing for the income tax hikes to kick in at $550,000 per family, and are unhappy with the Democrats’ proposal of higher taxes on investment profits for households earning over $250,000.
Politico reports that Vice President Joe Biden and Republican Senate Minority Leader Mitch McConnell made major progress overnight on a deal, with Biden having stepped in for the Democrats after Senate Majority Leader Harry Reid’s discussions with McConnell failed to reach a breakthrough.
In the absence of a bipartisan deal, Reid plans to bring to the Senate today a backup proposal that tackles a subset of the issues at stake, including keeping tax rates at their current levels for family incomes up to $250,000.
If the outlines of a bipartisan deal are reached, it will be first brought to a vote in the Senate. If it passes there, the House of Representatives would then quickly take it up for a vote.
You can also find a list of what will actually happen if the US does go over the fiscal cliff here.
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