UPDATE: Shortly after 2 a.m. Tuesday, the Senate voted 89-8 to approve a deal meant to address the tax hikes and spending cuts that technically went into effect at midnight, when the government sailed over the fiscal cliff. The deal now moves to the House of Representatives for action, perhaps as early as Tuesday afternoon. But House Republicans could still torpedo the agreement with amendments, Politico points out.
The eight senators who voted against the deal include Democrat Tom Harkin of Iowa and Republicans Chuck Grassley of Iowa, Rand Paul of Kentucky, and Marco Rubio of Florida. Here's the full roll call.
Tuesday, Jan. 1, 12:15 a.m.: We just went over the fiscal cliff, but we did it with a deal in hand.
The Senate is set to vote after midnight on a compromise package that would raise taxes on the nation's top earners while preventing most tax hikes on the middle class, Politico reports. The deal, brokered largely by Mitch McConnell and Joe Biden, was announced around 9 p.m. Monday, three hours before the deadline. But it didn’t pass either the Senate or the House before midnight, meaning that the dreaded cocktail of tax increases and spending cuts that was meant to spook legislators into striking a long-term budget deal did in fact take effect with the New Year, at least technically. The goal now will be to officially undo many of those provisions before they actually bite.
A rundown of the agreement's key provisions is here.* For details on how the deal transpired, check out the Washington Post’s full piece. For a reverse chronology of how the story shifted throughout the day, read on.
*Note: This post has been edited for clarity and length, with details of Monday night's deal removed and adapted for a separate post.
Monday, Dec 31, 4:45 p.m.: Look out below. House Republicans on Monday said they would adjourn for the day without voting on a potential Senate deal to avert the multiple whammy of middle-class tax hikes and wide-ranging spending cuts known as the fiscal cliff, according to the Huffington Post's Sam Stein and others.
Vice President Joe Biden and Senate Minority Leader Mitch McConnell are still widely reported to be trying to hammer out an agreement for Senate approval by day's end. But they aren't there yet, and House leaders apparently concluded that it wasn't worth waiting around any longer.
If there's any positive to be taken from Congress's depressing yet thoroughly unsurprising failure to take care of its business by the deadline, it's that a few House Republicans may find it easier to swallow a deal tomorrow than today. That's because, beginning tomorrow, taxes will have already gone up—so politicians might be able to claim that they're voting for tax cuts rather than hikes, according to CNN.
Monday, Dec. 31, 2:23 p.m.: What a letdown. In an address that some had dared to hope might herald an imminent deal on the fiscal cliff, President Obama instead contented himself with lobbing a couple of barbs at Congress and restating what we already knew.
"It appears that an agreement is in sight ... but it is not done," Obama reported in a press conference at the White House on Monday afternoon. "There are still issues to resolve, but we're hopeful that Congress can get it done."
Obama sketched the outlines of a potential deal that he said would stave off a scheduled middle-class tax hike while also extending tax credits for families with children, tuition tax credits, unemployment insurance, and tax credits for clean-energy spending. He said turning off the sequester—preventing a series of broad spending cuts scheduled to go into effect tomorrow if a deal is not reached—remained "a piece of business that still has to be taken care of."
He heralded the extension of the middle-class tax cuts as a significant victory, noting that it had been his top priority. "The last thing folks like the folks up here on this stage can afford right now is to pay an extra $2,000 in taxes next year," he said, gesturing to some middle-class Americans who had been trotted out for the occasion.
He did not specify the income threshold above which the Bush-era tax cuts would be allowed to expire. Reports have pegged the figure under discussion at $450,000 for families.
Obama said his preference would have been a larger and more lasting agreement, but added, "with this Congress, that was obviously a little too much to hope for at this time." Instead, he said he was resigned to solving the country's budget problems "in stages." As for today, he said he doesn't expect anyone to be able to go home early with a deal in hand. "One thing we can count on with respect to this Congress is that if there's even one second left before you have to do what you're supposed to do, they're gonna take that second."
Monday, Dec. 31, 11:02 a.m.: Joe Biden to the rescue? Fiscal cliff talks have taken on new life since Senate Minority Leader Mitch McConnell appealed to the veep to step in for Harry Reid on the Democrats' side Sunday afternoon, Politico reports. The pair, who served 23 years together in the Senate, were on the phone past midnight Sunday night, then back on the horn at 6:30 a.m. Monday, with the Senate scheduled to reconvene at 11 a.m.
With a "grand bargain" long dead, Biden and McConnell are said to be pushing toward a stopgap that could raise taxes on families with incomes above of $450,000, while extending tax cuts for those below the threshold. That would mark a significant compromise between the $250,000 threshold that Obama has pushed for and the Republicans' longtime no-tax-hike stance.
The deal would delay across-the-board spending cuts by three months, according to ABC News' Jonathan Karl, setting up another confrontation in March. That may sound depressing, but in Washington today, kicking the can is what passes for success. Of course, any agreement will still need to pass the House before the ball drops on Times Square if the cliff is to be averted.