President Obama and Senate Republicans reached a sweeping deal late Monday that would let income taxes rise significantly for the first time in more than two decades, fulfilling Obama’s promise to raise taxes on the rich and averting the worst effects of the “fiscal cliff.”
Vice President Biden arrived at the Capitol just after 9 p.m. to explain the details of the pact he negotiated with Senate Minority Leader Mitch McConnell (R-Ky.). A Senate vote on the package could be held by 10:30 p.m., beating a midnight deadline, Democratic aides said. The Republican-controlled House will begin considering the bill on Tuesday, with a final vote expected in the next day or two.
The agreement emerged after White House officials gave in on the last contested issue, yielding to GOP wishes on how to handle estate taxes, aides said.
The revelations about the pending deal came after President Obama had said a deal was “within sight,” and House Republican leaders announced they would hold no votes Monday night, making it appear that that the nation would go over the “fiscal cliff” for at least a day.
The Senate was moving, however, toward a late-night on the agreement negotiated by McConnell and Vice President Biden. With the House likely to reconvene at noon on Tuesday, a deal appeared imment that would cancel historic tax hikes for most Americans.
“I think it’s highly likely that some time this evening there’ll be a vote on the Senate side,” Sen. Bob Corker (R-Tenn.) said Monday evening as he emerged from a meeting with fellow Republicans and signaled that talks are continuing. “This is one of those things that could well go into the early morning by the time it goes to a vote. ... I think they’re attempting to get the legislative language in order and vote on it tonight, you know, 1, 2, 3, 4 in the morning, whatever.’’
Regardless of whether an agreement is reached to avoid the fiscal cliff, many Americans are all but certain to face a broad hike in taxes starting Tuesday because of the expiration of the payroll tax cut, which was enacted in 2011 as a temporary measure to boost economic growth. The increased payroll taxes, combined with hikes affecting the very wealthy, would effectively mark the end of a prolonged period of declining taxation that has become a defining characteristic of the American economy
The announcement that the GOP-controlled House would not vote on New Year’s Eve came after Obama urged lawmakers to “stop taxes going up for middle-class families, starting tomorrow,” and he called on them to remain focused on the needs of the American people rather than politics.
In what the White House billed as an event with middle-class Americans, Obama said there were “still issues left to resolve” in the talks. He said he was “hopeful that Congress can get it done. But it’s not done.”
Obama said the potential agreement that Biden and McConnell are crafting would prevent federal income taxes from rising on middle-class families, extend tax credits for children and college tuition, provide tax breaks to clean-energy companies and extend unemployment insurance for 2 million Americans.
