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House of Representatives Set to Pass Fiscal Cliff Bill

The House of Representatives will likely pass legislation today to extend all rates, including capital gain and dividends, for income under $1 million.  The bill also includes a permanent extension of the 35% estate tax rate with an exemption of $5 million.

It is unlikely the bill would pass in the Senate, and the President has indicated that he would veto the bill.

 

Boehner, Obama Continue Fiscal Cliff Negotiations

On Thursday, President Obama and House Speaker Boehner met for almost an hour at the White House about the fiscal cliff, but there were no obvious signs of progress, with both sides holding to their views on taxes and spending. The two sides released no information after the 50-minute session, the second face-to-face meeting they have held in the past week on a deal to extend expiring tax cuts and replace scheduled across-the-board spending cuts. The maneuvering spilled onto the House floor where House Majority Leader Eric Cantor rejected requests by Democrats floor votes on competing tax rate extensions.

 

Geithner Enters Fiscal Cliff Talks

Geithner Enters Fiscal Cliff Talks

November 30, 2012

Authored by: Matthew C. Jessee

On Thursday, Treasury Secretary Timothy Geithner met with Republican Congressional leaders and proposed a two-step process to raise $1.6 trillion in new revenue. The first step would net $960 billion immediately by allowing the Bush-era tax cuts to expire on top earners along with raising rates on dividends and capital gains. Another $600 billion would come from overhauling the tax code next year to reach the $1.6 trillion goal. Geithner also pressed for a patch of the alternative minimum tax and the extension of targeted business tax breaks at a cost of $236 billion.

Under Geithner’s proposal, the estate tax would return to its 2009 levels, when a 45 percent rate was imposed on inheritances worth more than $3.5 million.

Geithner also proposed deferring the scheduled $109 billion sequestration cuts. He proposed appropriating an additional $25 billion in stimulus spending, above the current baseline, for six years, with $50

Fiscal Cliff Negotiations Continue

Fiscal Cliff Negotiations Continue

November 26, 2012

Authored by: Matthew C. Jessee

On Monday and Tuesday last week, while President Obama was traveling in Asia, congressional and White House staff met regarding the latest fiscal cliff negotiations. The major “fiscal cliff” issues which must be dealt with before January 1 are income tax rates and automatic spending cuts. In addition to the fiscal cliff negotiations, other issues with a January 1 deadline which remain unresolved include the alternative minimum tax, unemployment benefits, payroll taxes, Medicare reimbursement rate, as well as the debt ceiling, which the Treasury Department says Congress must raise in the first quarter of 2013. President Obama is expected to reconvene congressional leaders next week to continue the negotiations.

For more information on the Fiscal Cliff, see our prior posts here and here.

Fiscal Cliff Talks Begins

Fiscal Cliff Talks Begins

November 16, 2012

Authored by: Matthew C. Jessee

On Friday, President Obama and Vice President Biden convened Majority Leader Reid, Minority Leader McConnell, Speaker Boehner and Minority Leader Pelosi for an initial discussion on how to avoid the combination of tax hikes and spending cuts that make up the “fiscal cliff.” While President Obama has stated his goal is $1.6 trillion in higher revenue, there is no agreement on how much deficit reduction the negotiators want to achieve and how much of that should come from taxes. In the event an agreement is not reached, the parties are already discussing fallback plans for $60 billion to $100 billion in deficit reduction to replace automatic spending cuts set to take effect in January.

For more information on the Fiscal Cliff, see our prior post.

 

Fiscal Cliff Looms as Congress Returns Next Week

Following last Tuesday’s election, Congress returns next week for its “Lame Duck” session and new member orientation. The combination of automatic spending cuts and tax increases (including the estate, gift, and generation-skipping transfer taxes) set to occur at year end known as the “Fiscal Cliff” will dominate the session’s debate. On Wednesday, Senate Finance Committee Chairman Max Baucus (D-MT) and House Speaker John Boehner (R-OH) both called for a short term bill that would delay the Fiscal Cliff until late 2013 so negotiators have time to craft a broader package. On Thursday, the Congressional Budget issued a report saying that the Fiscal Cliff’s tax increases and spending cuts would cause the unemployment rate to rise to 9.1 percent by the fourth quarter of 2013, compared to a jobless rate of 7.9 percent in October 2012. On Friday, President Barack Obama invited congressional leaders of both parties to the White House

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