After months of negotiating, arguing and handwringing, the United States avoided tumbling over the dreaded fiscal cliff Tuesday night when the House of Representatives passed the Senate proposal by a 257-167 vote, CNN reports.
After House Speaker John Boehner spiked an idea to re-open the Senate deal to add more spending cuts, Congress approved the measure with 172 votes from Democrats and 85 from Republicans, including Rep. Mike Fitzpatrick (PA-8).
"In August 2012, I voted to extend tax rates and other tax provisions for all taxpayers - a measure which the Senate refused to take up," said Fitzpatrick in a statement released by his office.
"Throughout the fiscal cliff debate, my number one priority has been to maintain the lowest rates possible for the greatest number of taxpayers. My vote tonight makes lower taxes permanent for 99 percent of taxpayers."
With the new deal, the Bush-era income tax rates for individuals making less than $400,000 and couples making less than $450,000 have been made permanent.
Salaries above that threshold have been raised from 35 percent to 39.6 percent, matching the rates from the Clinton Administration.
However, the Social Security payroll tax will rise from 4.2 percent to 6.2 percent. CNN reports that Americans making $30,000 per year will now take home about $50 less per month.
Other specifics of the deal, according to a White House fact sheet, include:
- Emergency unemployment insurance benefits are extended for 2 million people.
- The deal extends expansions of the Child Tax Credit, Earned Income Tax Credit, and the American Opportunity Tax Credit, for parents paying for their children's college tuition.
- The inheritance tax increases from 35 percent to 40 percent on estates worth $5 million or more.
- A cap has been placed on itemized deductions for individuals making $250,000 and couples making $300,000 a year.
- The deal extends the farm bill through the end of the fiscal year, averting a sharp rise in milk prices at the beginning of 2013.
The White House estimates that the new deal will generate $620 billion in revenue over the next 10 years, but the Congressional Budget Office notes that it also adds almost $4 trillion to the federal deficit, compared to what would have happened if no action had been taken.
Technically, the country went over the cliff on Jan. 1. If Congress had failed to act, the Bush tax cuts would have permanently expired, raising taxes by more than $500 billion in 2013. An automatic $109 billion in cuts to defense and domestic spending also was scheduled to trigger on Wednesday. That budget sequester, part of last year's debt ceiling agreement, has been postponed for two months.