Enter your email address and start getting breaking law firm and legal news right now!
|Promote Your Attorney Profile on Law.net - Get Found / Earn More!|
Crisis Averted As Senate Endorses Fiscal Cliff Deal
After some very tense moments that kept everyone on tenterhooks, the Senate passed legislation forestalling falling off the fiscal cliff and preventing the dire consequences of all-encompassing tax increases and spending cuts that threatened to take the nation back into recession.
The senators voted overwhelming in its favor and it came through 89-8, even though it spilled well past midnight and into one of the most eventful New Year’s Day in the nation’s history.
The White House backed legislation will not allow middle-class tax to increase but will see an increase in tax rates on individuals earning more than $400,000 and couples whose earnings exceed $450,000. Other aspects of core interests include blocking of spending cuts for two months, allowing the long-term jobless to continue getting unemployment benefits, which would have otherwise expired. Doctors who treat Medicare patients will now not have to take a 27 percent cut in fees and an increase in milk prices has also been thwarted.
The deal brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.), Congress would prolong the Bush income tax cuts permanently, estate tax will remain at a threshold of $5 million and unemployment benefits would be extended for another year.
Spending expenses would be met by a combination of increases in taxes and later spending cuts. A major portion of these cuts would be from defense spending.
At the last minute it was also agreed upon that the proposed pay raise of $900 for members of Congress would have to wait and would not be taking effect, as assumed earlier, in March.
Vice President Biden convinced his Democrat colleagues that this was the best deal that could be settled upon, if both parties had to grant their consent and that even if it left a lot to be desired, it was better than toppling over the cliff.
Following the deal many Democrat senators expressed their displeasure with many facets of the deal but said that they agreed with what the vice-president had to say and in the larger interests of the country agreed to it.
Sen. Chuck Schumer (D-N.Y.) said that there were many disagreements over many provisions and this deal cannot be said to be very popular or well-liked but he said that the number of people who would have preferred that we go over the cliff was “very small.” He said, that Biden made a very convincing argument that going over the cliff would be devastating and it did not take the senators long to understand its seriousness.
Sen. Dianne Feinstein (D-Calif.) echoed Schumer’s feelings about Biden’s message. He said that this was the best that could be done and to get both sides to agree, both would have to make compromises.
Sen. Barbara Boxer (D-Calif.) said that the deal was good for both her constituency and America. The main worry at this point in time, she said, was to keep the economy moving and felt that the package will help do that.
However, Speaker John Boehner (R-Ohio) was non-committal about bringing the bill to the house if the Senate was to pass it, saying that until all House members and the American people get to assess the legislation he would not take a decision either way. However, a House vote is expected before Wednesday.
It worked in the government’s favor that Tuesday is a holiday and the financial markets are closed, giving them a breather to unshackle the problem areas of this fiscal entanglement.
Law firm K&L Gates partner Mary Burke Baker, says that it hardly matters whether the law is passed today, tomorrow or on Wednesday. Legislation can be back dated and that the day that is really important is the day when the President signs the legislation.
Republicans accused the President of behaving stubbornly and said that is not how a President should behave. But this is just buying time, come February the issue of the “sequester” spending cuts will rear its head again as also the questions about the “debt ceiling” and how much debt can the government allow itself to be burdened with.
Republicans, who have consented to averting the cliff, are hoping that they can manage to pin down the President on these two issues and perhaps get him to curtail government spending.
The fight is by no means over.Crisis Averted As Senate Endorses Fiscal Cliff Deal by EmploymentCrossing