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Last Minute Fiscal Cliff Deal Emerging

With less than twelve hours to go before the end of the year, it would appear that agreement is close on a deal that would avoid the largest part of the so-called Fiscal Cliff:

Most of the world is counting down to a midnight New Year’s celebration while Congress continues to watch the clock and count down to another deadline, despite the efforts of lawmakers to avert the ” fiscal cliff.”

And as President Obama is set to urge negotiators to focus on the middle-class, CBS News has learned that there’s been agreement on one of the major hangups to a deal.

Multiple congressional sources tell CBS News that the two sides have agreed on an income threshold for the expiration of the Bush-era tax cuts for the wealthiest Americans: $400,000 for individuals and $450,000 for families. For weeks, Democrats have pushed for letting the cuts expire for those making over $200,000 and families making over $250,000 while Republicans have wanted to renew the cuts for all Americans, including the wealthiest.

Vice President Joe Biden and Senate Majority Leader Mitch McConnell, R-Ky., have been the key negotiators over the past 24 hours and the movement on taxes represents a huge step forward in the talks.

Other items that could be included in a deal include an extension of unemployment benefits and reimbursement rates for doctors who treat Medicare patients. As both of those items are costly, Republicans are worried that the new deal could raise the deficit instead of cutting it.

Of course this leaves major issues such as the debt ceiling and the sequestration cuts unresolved, and merely guarantees that we’ll see another debacle like this in two or three months time. But, hey, we’ll be needing something to entertain us about then anyway.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. edmond says:

    People who earn $400,000 a year are middle class? Congresspeople live in a bubble.

    Like or Dislike: Thumb up 8 Thumb down 0

  2. PJ says:

    The House isn’t going to vote tonight.

    Like or Dislike: Thumb up 0 Thumb down 0

  3. Argon says:

    And cue the GOP congress critters going full emo and blowing up any deal ‘because Obama was mean to them’ in 3, 2, 1…

    And oh, look! Sen. McCain, former POW, war hero, long-term legislator and thin-skinned concern troll from Arizona playing the ‘hurt fee-fees’ card when the President complains about the least productive US Congress *ever*, since the formation of the country.

    Like or Dislike: Thumb up 5 Thumb down 0

  4. matt says:

    @edmond: In New york city probably.

    Like or Dislike: Thumb up 1 Thumb down 5

  5. matt says:

    @matt: Oh for god’s sake really you’re going to down-vote a simple statement? The cost of living in New York City is substantially higher then small town Ohio.

    Like or Dislike: Thumb up 1 Thumb down 5

  6. Rafer Janders says:

    @matt:

    Oh for god’s sake really you’re going to down-vote a simple statement?

    I will when it’s false.

    The cost of living in New York City is substantially higher then small town Ohio.

    The median household income in New York City is approximately $56,000/year, compared to $48,000/year in Ohio. A household earning $400,00/year in New York has over seven times the average income of a typical NYC household. It is nowhere near close to middle class.

    Like or Dislike: Thumb up 10 Thumb down 1

  7. James Joyner says:

    @matt: @Rafer Janders: I think Obama comes out ahead in this compromise, precisely because $250,000 does indeed seem like a middle class income to many metropolitan Democrats. At $400,000, though, it’s a much harder argument to make. Granted, a kid right out of Harvard Law might be making that in a big firm. But it’s still very high income even in Manhattan, Boston, LA, or DC.

    Like or Dislike: Thumb up 3 Thumb down 1

  8. edmond says:

    “I think Obama comes out ahead in this compromise, precisely because $250,000 does indeed seem like a middle class income to many metropolitan Democrats…”

    Actually Obama loses again because he reinforced the Democrats’ and Republicans’ perceptions that he is a weak, ineffective negotiator who will not drive a hard bargain even when he holds all the winning cards. He is in for a long, hard four years and he’s making the country pay for his own shortcomings. We have a rabid irrational right wing getting just about everything they want from a spineless, vacillating executive who dreams of being crowned as a “post partisan leader” by David Brooks.

    Like or Dislike: Thumb up 1 Thumb down 1

  9. Rafer Janders says:

    @James Joyner:

    Granted, a kid right out of Harvard Law might be making that in a big firm.

    A “kid” (actually, a 25 year old adult with a doctor of law degree) right out of HLS and working at a big New York firm will be making approximately $165,000/year.

    Like or Dislike: Thumb up 2 Thumb down 0

  10. Rafer Janders says:

    @James Joyner:

    I think Obama comes out ahead in this compromise, precisely because $250,000 does indeed seem like a middle class income to many metropolitan Democrats.

    Maybe inside the Beltway bubble you inhabit, but otherwise It really doesn’t. I’m a metropolitan Democrat who makes more than that, and I know I’m not middle class.

    And it can’t really seem like a middle class income to “many” Democrats, because there aren’t many Democrats who make that much in the first place. Only 2% of all households in the US have incomes exceeding $250,000. So 98% of Democrats make less than that, and are well aware that $250K is actually more than a middle class income.

    But it’s still very high income even in Manhattan, Boston, LA, or DC.

    All cities where the median household income is in the $50,000 to $60,000/year range, and where $400,000 is seven and a half to eight times the average.

    Like or Dislike: Thumb up 3 Thumb down 1

  11. Rafer Janders says:

    @Rafer Janders:

    To expand on that, $400,000 a year is partner-level compensation. Associates don’t make that much.

    Like or Dislike: Thumb up 1 Thumb down 1

  12. matt says:

    @Rafer Janders: I thought we were talking about household income not individual.

    Like or Dislike: Thumb up 0 Thumb down 0