On Monday, the federal government once again hit its debt limit, having borrowed all of the additional $2.4 trillion authorized by the Obama-Boehner deal.
According to a summary of the fiscal cliff deal published by the New York Times, it increases the income-tax rates for individuals making more than $400,000 and couples making more than $450,000. It also phases out exemptions and deductions for individuals earning more than $250,000 and couples earning more than $300,000.
The deal, according to the Times, also puts a two-month "pause" on $110 billion in spending cuts that would have taken place in 2013 under the Obama-Boehner deal of 2011. So, the future spending cuts that were agreed to in August 2011 as compensation for immediately increasing the debt limit by $2.4 trillion are now on hold--even as that $2.4 trillion in new debt has already been accumulated.
The bill passed the Senate at 1:39 in the morning on an 89-to-8 vote with 3 not voting. In addition to Paul, Lee and Rubio, Republican Senators Charles Grassley of Iowa and Richard Shelby of Alabama also voted no. On the Democratic side, Senators Tom Harkin of Iowa, Thomas Carper of Delaware and Michael Bennet of Colorado voted no.
Sen. Jim DeMint of South Carolina, who is resigning from the Senate, did not vote. Nor did Sen. Mark Kirk of Illinois or Sen. Frank Lautenberg of New Jersey.
Working with Vice President Joe Biden, Senate Minority Leader Mitch McConnell (R.-Ky.) negotiated the deal on behalf of Senate Republicans.
“I know I can speak for my entire conference when I say we don’t think taxes should be going up on anyone, but we all knew that if we did nothing they’d be going up on everyone today," McConnell said in a statement. "We weren’t going to let that happen.
“Each of us could spend the rest of the week discussing what a perfect solution would have looked like, but the end result would have been the largest tax increase in American history," said McConnell.
“The President wanted tax increases, but thanks to this imperfect agreement, 99% of my constituents won’t be hit by those hikes," he said.
“So it took an imperfect solution to prevent our constituents from very real financial pain," he said. "But in my view, it was worth the effort."
"We’ve taken care of the revenue side of this debate," said McConnell. “Now it’s time to get serious about reducing Washington’s out-of-control spending. That’s a debate the American people want. It’s the debate we’ll have next. And it’s a debate Republicans are ready for.”
For this deal that McConnell negotiated with the White House to become law, the Republican-controlled House of Representatives will need to approve it.