Fiscal cliff agreement reached?
Washington, D.C. (CNN) –- A deal was reached between Congressional leaders and the White House late Monday night, according to a Democratic source.
The agreement brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell was later signed off on by House Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid during calls with President Barack Obama, said a source familiar with the deal.
The same source said the plan postpones the sequester by two months, half paid for through tax revenue and half paid for through spending cuts. Half of the spending cuts stems from defense spending and half from non-defense spending.
The individual $5 million exemption level for the estate tax, an element supported by Republicans, will remain. But that cap is indexed to inflation, meaning it will increase every year, according to the same source, an element incorporated at the insistence of moderate Democrats.
Additionally, the “Doc Fix,” payments to doctors who take Medicare patients that the GOP wanted, will continue but will not be paid for by the Affordable Care Act.
The tentative agreement also includes a one year extension of unemployment benefits and will allow income taxes for individuals making $400,000 a year and households making $450,000 to return to the Clinton-era rate of 39.6%.
The deal resolves other outstanding sticking points by including an extension in tax credits for child care and tuition. It also caps itemized deductions, starting at a threshold of $250,000 for individuals and $300,000 for households.
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