Although labeled as the "fiscal cliff deal," the American Taxpayer Relief Act (ATRA) enacted into law left many budget issues unresolved or only temporarily resolved. While the deal permanently addressed the expiring tax cuts and AMT patches, many other provisions were only extended temporarily. The sequester, one of the largest components of the cliff, was delayed for only two months.
Over the past week, CRFB has examined the composition, budgetary effects, and economic effects of the American Taxpayer Relief Act (ATRA), which replaced most of the fiscal cliff.
After a tense few days, or weeks for that matter, lawmakers have enacted a fiscal cliff package -- the American Taxpayer Relief Act. With budget negotiations likely laying low for a few days, we turn our attention to where the deal leaves the budget. We previously analyzed the budgetary effect of each provision of the deal relative to both current law and current policy. In this blog, we will go into more detail on what the budget will look like after the deal.
Last night, the House passed the fiscal cliff package already agreed upon by the Senate, by a 257-167 vote. Now the bill is headed to the White House, where it is expected to be signed by President Obama.
It appears both sides are quite close to a deal that would avert (or at least quickly reverse) the fiscal cliff. Although negotiations remain ongoing and not all the information is public, here is what we know -- or think we know -- would be included in the deal as it has been negotiated so far:
With the fiscal cliff only two weeks away and the upcoming holiday season, negotiations for replacing the fiscal cliff with a sensible deficit reduction plan appear to have accelerated. Over the weekend, Speaker Boehner reportedly made an offer to the White House that included $1 trillion in spending cuts and $1 trillion of revenue – with some of it coming from letting the upper-income tax cuts expire on millionaires.
Fiscal Commission co-chair Alan Simpson appeared last night on "The Daily Show" to talk about the fiscal cliff and the national debt. And of course, the back and forth between Simpson and Stewart is pretty hilarious. He stays on for a little while for an extended interview, so watch all three parts below.
UPDATE: Debt numbers in table have been slightly altered since the original posting.
With now less than a month before the country would go over the fiscal cliff, proposals from both sides have been put on the table. While a final deal could look different than the presented plans, they do provide a guide to where the negotiations stand and where lawmakers may head to reach a compromise.
We've shown that there a plenty of reasons to not go over the fiscal cliff, including that it implements fiscal consolidation in an abrupt and blunt way causing a recession and puts a great deal of strain on the poor.