The U. S. House by a vote of 257 to 167 approved a Senate bill that averts the much publicized fiscal cliff. The votes mark the end of a frenetic few days on Capitol Hill and a month of high drama in Washington. The bill allows tax rates to jump to 39.6 percent on income over $400,000, ending 20 years of lower federal tax rate for the rich. The bill also delays deep across the board spending cuts for two months, cancels pay raises for congress members and avert a hike in milk prices by extending expiring dairy policy. It also includes a year-long extension of unemployment benefits and business friendly tax provisions. It would also extend the earned income tax credit, child tax credit and college tax credit for five years.
The deal would also prevent rate cuts to doctors who treat Medicare patients, dividends and capital gains on family income above $450,000 would be taxed at 20 percent, up from the current 15 percent rate. The bill now moves on to President Barack Obama who has already promised to sign the measure into law.
An analysis by the Congressional Budget Office released Tuesday estimated the bill would add $4 trillion to the deficit over a decade.