No Deal Yet on Fiscal Cliff

Probable House and Senate Session Next Week This week, fiscal cliff negotiations stalled between President Obama and Speaker of the House John Boehner (R-Ohio).  Instead of moving closer this week, the parties have moved a little farther apart.  The House is voting on two bills that would address both the upcoming tax increases and spending cuts that comprise the fiscal cliff.  The first of the two bills – known as “Plan B” – would permanently extend the 2001 and 2003 marginal tax rates for incomes under $1 million. It would also make the Alternative Minimum Tax patch permanent, set the estate tax permanently at this year’s level and make the increase in expensing of depreciable business assets permanent.  It will also prevent an increase in capital gains and dividend rates.   The second bill – The Spending Reduction Act of 2012 – replaces part of the across-the-board spending cuts, known as sequestration, for one year.  President Obama has issued a veto threat on Speaker Boehner’s “Plan B”, which means that in order to avert the fiscal cliff, the Speaker and the President still must come to a compromise that will pass both the House and Senate. At this point it is unclear if the fiscal cliff will be resolved.  It is anticipated that the President and the Speaker will continue to negotiate over the next week. AGC weighed in on the fiscal cliff with a letter to the president and House and Senate leaders and will continue to monitor the situation through the Christmas and possibly the New Year’s holiday. For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org.