President Obama and Senate leaders struck a bipartisan agreement late Monday to let income taxes rise sharply for the first time in two decades, fulfilling Obama’s promise to raise taxes on the rich and avoiding the worst effects of the “fiscal cliff.”
The agreement, brokered by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.), primarily targets taxpayers who earn more than $450,000 per year, raising their rates for wages and investment profits. At the same time, the deal would protect more than 100 million households earning less than $250,000 a year from income tax increases scheduled to take effect Jan. 1.
The deal came together barely three hours before the midnight deadline, after negotiators cleared two final hurdles involving the estate tax and automatic spending cuts set to affect the Pentagon and other federal agencies this week.
Republicans gave in on the spending cuts, known as sequestration, by agreeing to a two-month delay in budget reductions that would be paid for in part with new tax revenue, a condition they had resisted. And the White House made a major concession on the estate tax, agreeing to terms that would permit estates worth as much as $15 million to escape taxation by the end of the decade, Democrats said.
As Biden rushed to the Capitol to brief Senate Democrats on the deal, Majority Leader Harry M. Reid (D-Nev.) laid plans for a vote shortly after midnight, when taxes were set to rise for virtually every American.
“I think we’ll get a very good vote tonight,” a beaming Biden said as he emerged from the meeting with Democrats after nearly two hours. “But happy new year and I’ll see you all maybe tomorrow.”
Upon Senate passage, the measure would go to the House, where Speaker John A. Boehner (R-Ohio) pledged to bring it to a vote in the coming days. “Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members — and the American people — have been able to review the legislation,” Boehner and other GOP leaders said in a written statement.
Senior aides predicted the measure would pass the House with bipartisan support. But Boehner’s decision to delay the vote meant the nation would tumble over the cliff at least briefly.
In addition to dealing with the fiscal crisis, the measure would extend federal farm policies through September, averting an estimated doubling of milk prices. The deal also nixed a set pay raise for members of Congress.
During a midday event at the White House, Obama praised the emerging agreement even though it would raise only about $600 billion over the next decade by White House estimates — far less than the $1.6 trillion the president had initially sought to extract from the nation’s richest households.
The agreement “would further reduce the deficit by asking the wealthiest 2 percent of Americans to pay higher taxes for the first time in two decades. . . . So that’s progress,” Obama said.
“Keep in mind that just last month, Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans. Obviously, the agreement that’s currently being discussed would raise those rates and raise them permanently,” he said.
WALL STREET 'UNLIKES' FACEBOOK Facebook's looming IPO was the most hyped stock offering of the year, breathless coverage leading up to the big day in mid-May. But when the price of a share was set at $38 - which led to the company being valued over $100bn with revenues of just $3.7bn - the offering flopped. The firm's value fell by 28% and its shares are trading somewhere near $25.
LETTING GO OF THE PAJAMAS After Rahul Dravid and VVS Laxman gracefully hung up their boots this year, attention turned to 39-year-old Sachin Tendulkar. A string of test failures only added to the pressure and after a few months of 'will-he-won't-he', the maestro announced a retirement. Well, kind of. While he may have played this one with soft hands, by quitting ODI arena, many still await big doosra sometime next year.
NO WAY UP FOR THE CONGRESS Over the last few years, the Congress, led by its princeling, Rahul Gandhi, had been telling the world that it was in the process of 'revitalising' itself in UP, its former political karmabhoomi. Rahul and his advisers led protests, staged big rallies and toured the state in the run-up to polls this year. But when the party was handed a drubbing, party leaders scrambled to defend the heir. Heads rolled, chins sagged and the usual infighting broke out, some leaders accusing others of sabotaging the party's grand strategy. Pollsters wondered what strategy they were referring to.
US ELECTIONS: THE TIE THAT WASN'T In an 'election year' the White House's next occupant was America's big obsession for most of the year. Much of that had to do with every pundit worth his morning decaf mouthing some variation of the line that the race between Mitt Romney and Barack Obama was either "too close to call" or going "right down to the wire". Some predicted a tie, with a messy mixed presidential outcome to follow. In the end, Obama won.
THE T-WORD For many in Telangana, the centre dithers, it would seem, while AP burns. When the agitation for a separate state gathered momentum towards the end of last year, the home ministry made conciliatory noises and several predicted that 2012 would see the birth of Telangana, with a compromise on the tricky Hyderabad issue. Nothing happened, and as angry protesters break barricades this week, the current HM appears to be making the right kind of noises, again. Now for 2013.
IT WAS ALL MAYA Like Mark Twain, the world can't get enough of the fact that reports of its death are greatly exaggerated, time and again. Based on some pseudo-scientific twaddle — which apparently revealed the 'discovery' of an ancient Mayan prediction that the world would end when the Mayan calendar 'ran out' on December 21, 2012 — a veritable crescendo of doomsday hype echoed all around the globe this year. It proved to be the year's most irksome non-event.
THE AVENGERS DISSEMBLE 
