US Senate votes to ‘avoid imminent tax hikes and spending cuts’

“The Senate moved the U.S. economy back from the edge of a “fiscal cliff” on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives. In a rare New Year’s session at around 2 a.m. EST (0700 GMT), senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade,” David Lawder and Richard Cowan wrote for Reuters from Washington today. Lawder and Cowan continued, “But the measure did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion. The agreement came too late for Congress to meet its own deadline of New Year’s Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday. But with the New Year’s Day holiday, there was no real world impact and Congress still had time to draw up legislation, approve it and backdate it to avoid the harsh fiscal measures. That will need the backing of the House where many of the Republicans who control the chamber complain that President Barack Obama has shown little interest in cutting government spending and is too concerned with raising taxes. Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

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