The fate of a hard-fought early-morning Senate deal on tax hikes and spending cuts now rests with the House of Representatives where it faces a tough sell.
Members of the GOP-controlled House are scheduled to meet at noon and take up the measure. If House lawmakers approve the legislation, it will then go to President Obama to sign. But if the House fails to come to a compromise, Americans could be in for a very rocky start to the new year.
Taxes would jump by $2,400 on average for families with incomes of $50,000 to $75,000, according to a study by the nonpartisan Tax Policy Center. Because consumers would get less of their paychecks to spend, businesses and jobs would suffer.
At the same time, Americans would feel cuts in government services; some federal workers would be furloughed or laid off and companies would lose government business. The nation would lose up to 3.4 million jobs, the Congressional Budget Office predicts.
The current Congress is in session only through 12pm ET on Jan. 3. After that, a newly elected Congress with 13 new senators and 82 new House members will inherit the problem.
Early Tuesday morning, the Senate approved a scaled-down package aimed at halting historic tax hikes for most Americans and postponing across-the-board spending cuts, just hours after Congress missed a midnight deadline for action.
The Senate voted 89-8 in favor of the package, which was hastily pulled together after a late-night deal between White House and Senate Republican negotiators.
In total, $600 billion in tax hikes and spending cuts are scheduled to hit in the new year unless and until the legislation is finalized.
But the goal in Washington is to produce a bill that could patch up the problem in the coming days, sparing most Americans from any major or lasting blow to their paychecks.
Senate leaders hailed the deal as an "imperfect" but vital solution to the fiscal crisis...Obama praised Senate lawmakers for passing the bill and implored the House to do the same...
Under the proposal, current tax rates would be extended for everyone except families making above $450,000 -- up from President Obama's earlier threshold of $250,000. The bill would also extend long-term jobless benefits for a year and address other expiring provisions like the estate tax.
The late-night deal ironed out the last major sticking point between the two sides -- what to do about the $110 billion in automatic spending cuts set to kick in starting in January.
Officials said the two sides agreed to postpone the cuts by two months, in exchange for a 50-50 mix of revenue increases and spending cuts. Of those cuts, half would come from defense and half would come from other budgets.
Fox News has also learned the deal contains a repeal of an ObamaCare program called the CLASS Act. The provision, which would set up a government-run long-term care program, was never actually implemented amid concerns that it couldn't generate enough revenue to sustain itself.
The big question is whether the Senate plan can pass the House -- and if so, when. The longer the stalemate drags on, the greater the risk for the economy and taxpayers.
READ FULL SOURCE ARTICLE: 01/01/2013
Editor's Note: Seeing as how the US Constitution mandates that all legislation pertaining to finance and revenue must come from the House, it is unconstitutional -- and, in fact, annoying -- that the Senate continually insists on crafting financial legislation. When will the lawsuits come challenging the Senates unconstitutional actions?
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