The country has been waiting to see if Congress would pass legislation to avert the impending fiscal cliff. Congress did pass a new package Tuesday evening to extend most tax cuts as well as an extension of the current farm bill.
The Senate passed the package with an 89-8 vote, while the House was much more split, voting 257-167 in favor of the bill.
Sen. Mike Johanns sent a release following his support of the measure. He said, "This agreement isn't my ideal option, but I firmly believe going over the cliff isn't an option at all."
"I would have preferred stopping a tax hike for every American, significantly reducing spending and strengthening Social Security and Medicare. This package, however, is a vast improvement from the Administration's original proposal and no one can overlook the fact it protects an estimated 99 percent of Americans from being hit with the largest tax hike in our nation's history."
Congressman Adrian Smith voted against the fiscal cliff agreement and said, "This debate is not over. My concerns about spending remain and I will continue to fight to reduce the deficit and pass commonsense tax reform to put our country on a more sustainable and prosperous path. We must find an alternative to arbitrary defense cuts, but simply delaying these difficult decisions without replacing the spending reductions is the wrong approach."
The fiscal cliff is a combination of expiring tax relief and automatic spending cuts that would have kicked in at the beginning of next year. Since the package was not signed by President Obama before the New Year, the deal will take place retroactively so tax rates will continue uninterrupted for the overwhelming majority of American taxpayers.
Below are the details of the package:
Without this agreement, American taxpayers would face a tax increase of almost $536 billion a year – the steepest single tax increase in American history. Roughly half of these tax increases would come from the expiration of the current income and investment income tax rates implemented during President George W. Bush's tenure.