CNN Reports a Fiscal Cliff Bill Update

Obama signs bill warding off fiscal cliff

By Matt Smith, CNN

updated 2:17 AM EST, Thu January 3, 2013

(CNN) -- President Barack Obama has signed into law a bill to avert the fiscal cliff, a day after the House and Senate approved the much-debated legislation.

 

Obama, who returned to his family vacation in Hawaii after Tuesday's House vote, signed the bill via autopen on Wednesday.

 

But new battles over taxes and spending await Washington in the next few weeks.

 

Congress averted that self-built precipice late Tuesday when the House voted to stave off widespread tax increases and deep spending cuts by accepting a brokered Senate compromise. It makes permanent the Bush administration's tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000.

 

It raises rates on those who make more than that from 35% to 39.6%, bringing back a top tax bracket from the Clinton administration, and will raise roughly $600 billion in new revenues over 10 years, according to various estimates.

 

The bill also extends unemployment insurance and delays for two months the threat of sequestration -- a series of automatic, across-the-board cuts in federal spending.

 

Economists had predicted the combination of those tax increases and spending cuts could have thrown the U.S. economy back into recession and driven unemployment back into the 9% range.

 

Meanwhile, a new Congress takes office on Thursday, and lawmakers will soon be confronted by the need to raise the federal debt ceiling and what to do about the still-hanging sequester -- a legacy of the last battle over the debt ceiling, in 2011.

 

Read full article here:  http://www.cnn.com/2013/01/02/politics/fiscal-cliff/index.html