warning Hi, we've moved to USCANNENBERGMEDIA.COM. Visit us there!

Neon Tommy - Annenberg digital news

Fiscal Cliff Deal: 5 Things To Know

Amanda Martinez |
January 2, 2013 | 10:11 a.m. PST

Executive Producer

(Creative Commons)
(Creative Commons)
A 257-167 vote by the House of Representatives late Tuesday evening sealed the deal for fiscal cliff-related tax increases that will affect more than 99 percent of households.

Here's five things to know about the bill:

1. Wealthiest Americans Bear The Biggest Burden

Individuals making more more than $400,000 a year and families making more than $450,000 will foot the bill for a revenue savings of $620 billion over the next 10 years. The deal redefines the wealthiest Americans as the top 0.7 percent of the population, instead of Obama's previous claim that the top two percent--those making $250,000 a year--would see tax rates increase.

2. Taxes Will Rise For Most Americans

While President Obama stressed that 99 percent of Americans won't see an income tax increase, the majority of them will still see a federal tax hike this year. The last-minute deal did not address a temporary Social Security payroll tax reduction, impacting nearly 77 percent of all American households--and not just the wealthiest.. For a look at how the tax increases will affect households from low-income and higher-earning families, the LA Times broke down the numbers.

3. Biden's Big Role

Obama cut short his family vacation in Hawaii to address the fiscal cliff, but it was Vice President Joe Biden who spearheaded the late night deal. Along with Kentucky Senator Mitch McConnell, the vice president logged a two-hour New Year's Eve session with the Senate Democrats to broker a deal.

4. A House Divided

Although Speaker John Boehner supported the package, both House Majority Leader Eric Cantor and Majority Whip Kevin McCarthy voted against the measure. Former vice presidential candidate Paul Ryan voted for the deal, after a last-minute change of mind. The division in leadership sparked rumors of Boehner's replacement, although the Associated Press said the standoff only left the speaker "wounded."

5. Debt Ceiling On The Horizon

Don't expect the financial drama to go away just yet. The GOP will go head-to-head with the president as early as mid-February for spending cuts in exchange for raising the debt ceiling. As the government hit its $16.4 trillion borrowing limit Monday, Obama is almost certain to accept cuts in entitlement programs to prevent a default, sequestration and a government shutdown.

According to USA Today, the failure to address the debt ceiling could set the economy up for failure. Broader tax increases could scare away business leaders who are still wary of hiring and investing any time soon.

Fore more of Neon Tommy's coverage on the fiscal cliff click here.

Reach Executive Producer Amanda Martinez here.



Craig Gillespie directed this true story about "the most daring rescue mission in the history of the U.S. Coast Guard.”

Watch USC Annenberg Media's live State of the Union recap and analysis here.