Obama Signs Fiscal Cliff Bill Into Law

By on January 3, 2013 in Current Events with 28 Comments

President Obama has signed the fiscal cliff bill that passed Congress late Tuesday night from Hawaii using autopen, a mechanical device that copies his signature.

Of note for the federal workforce: the bill that was passed is not the one that contains an extended pay freeze. That is a separate piece of legislation voted on earlier in the day by the House.

With the president’s signature, the pay raise that would have been given to Congress is now officially withdrawn. The 0.5% raise taken Congressional annual salaries from $174,000 to $174,900.

Other highlights of the bill include:

  • Tax rates will rise on income above $400,000 for individuals and $450,000 for households
  • Estate tax increases from 35% to 40% for estates over $5 million
  • Unemployment benefits will be extended by one year for some two million Americans
  • The payroll tax holiday will not be extended taking the Social Security payroll tax from 4.2% to 6.2%

The Congressional Budget Office estimates that the agreement will increase the national debt by $4 trillion over the next decade.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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  1. Olijoel says:

    Ok… Don’t tell me that Dinesh D’Souza’s documentary “Obama 2016” is setting up so fast!!

  2. Hopeisnot A. Plan says:

    At least we should no longer hear about the damage caused by the “Bush” tax cuts.  Since Obama and the Dems have made those cuts permanent they now are the Obama tax cuts.  What are the libs going to whine about now?  The tax cuts, the wars, the deficit and the debt all rightly belong to Obama now.

    • skisok says:

      Actually, the rate he wanted was to increase on those making $250,000 and above, hence some of it is still with the predecessor.  Why don’t we get hedge fund managers who make millions of dollars and pay a capital gain rate to pay their fare share and companies shipping jobs overseas and hence tax money, to no longer get the tax breaks they’ve been getting.  I guess that is too logical.

  3. J_Mac2 says:

    The final reference to the CBO’s analysis leaves out the key fact that this is a comparison to what would happen once the Bush tax cuts are fully rescinded and if the rest of the “cliff” provisions were left in place.  This is an unrealistic baseline.  Others have estimated that that the deal will reduce the deficit by about $600 billion from the pre-cliff baseline.

    • wombat1951 says:

      Trying to figure out which fantasy calculation to believe is all part of the design in DC.  
      :
      The bottom line is still very simple — the Left got their tax hike AND a lot of spending hikes.  The annual $1.4T Obama deficits are not effected much at all.    The reason is simple — the SPENDING isn’t being addressed.
      :
      When over 41% of what the Feds spend has to be borrowed, the train is still going over the cliff.   It will be entertaining to see what excuses for not addressing spending emerge from the Obama brain trust in coming months.   But be assured that whatever they say — spending will continue unabated and along with it the out of control borrowing and printing of fiat money to monetize a lot of that debt.

  4. admode says:

    Well, his auto pen actually signed it into law.

  5. Fed_Peasant says:

    I don’t hate “poor” Grover.  He is a very highly paid lobbyst.  He is NOT an elected official.  He is NOT a political appointee.  He is NOT a business executive.  He is in a real sweet spot to represent people with big bucks.  They are giving him some of those big bucks, in order to hopefully save some.  Grover is a fantastic tax shelter.  He is raking in the money!  The man is an achiever!!  Hate him?  NO.  Do I see him for what he is?  YES!!

  6. HLL7575 says:

    With the housing market recovering, and the Election was over, I expect a boom year for 2013!  Americans are optimists and ready to work and spend.  All the ingredients are here, especially if you have been reading the “tea leaves” (pun intended).  Entitlement reforms are imminent (even Nancy Peloci is for the chained-CPI).  Obama mostly delivered his pledge to raise taxes of the rich and protect the middle class, now he can use his political capital for entitlement reforms.  So ready or now, chained-CPI is a certainty, like it or now.  Means test for the rich for entitlements should not be far behind. 

  7. steve5656546346 says:

    More spending! More debt!  More taxes!  More drag on the economy!

    Whoopie!

    • grannybunny says:

      It could have been much worse.  We could have had the drag on the economy of the higher taxes and draconian spending cuts of the Fiscal Cliff, which would have led us back into Recession, with even fewer tools to fight it this time.

  8. grannybunny says:

    At last.  There, that wasn’t so hard after all, was it?

    • steve5656546346 says:

      Nope!  Just more taxes, and more spending! And more drag on the economy!

      Bankruptcy is not hard!  It is easy!

    • Fed_Peasant says:

      Grover Norquist is waiting for the next round & getting yet higher contributions, as a lobbyst!!  He is the best tax shelter there ever was!!  The upper income types will throw money at him.  Grover is rolling in the dough…LOL!!!

      • grannybunny says:

        No doubt Grover is richer than ever.  However, if all of those who — misguidedly — took his Pledge stand up to him, in recognition that there is a legitimate time to increase taxes (or, more accurately, to allow what were intended to be temporary tax cuts to expire), he will lose his death grip of power on Congress.

        • burgerchecker says:

          Is there a legitimate time to institute real cuts in government spending as well? Or will tax increases just mean an increase in spending? In which case the new spending will be permanent and the tax revenues will actually decrease with the higher rates as pointed out when tax rates are raised throughout history which inturn will make the deficit even worse.

          • grannybunny says:

            Of course, there’s a legitimate time to cut spending, but — of course — the fiscal cliff was partly comprised of draconian spending cuts, which would have hurt the economy more than helping it.  And the new tax rates — by the way — are permanent.

  9. Fed_Peasant says:

    This took extra long because every single republican had to first consult with Grover Norquist.  It’s a funny thing about that.  I do not recall seeing a “Grover Norquist” on any ballot, in the November election?  I  am glad that they will now properly fund social security.  They have ended that payroll gimmick thaat reduced the contribution.

    • steve5656546346 says:

      Well, the important thing is that we now have still more government spending, higher taxes, and more debt.  And our economy will continue to struggle.  And we are going bankrupt.

      But hating Grover Norquist will make it all right!

  10. HRGuy71 says:

    The Senate-White House compromise passed by the House is a classic political misdirection. The biggest tax increase in 20 years was passed in return for spending increases, but portrayed for political purposes as a “tax cut for the middle class.” Taxes on the middle class were going up on January 1 because the politicians constructed it that way. And, voila, we have manufactured a fake crisis. The politicians now portray themselves as scrambling heroically to save the day by sparing the middle class while raising taxes on small business, investors and the affluent.The better way to see this is that the new taxes are forced the part of the economy that creates wealth and innovation as the payment for President Obama’s first-term spending and re-election.

    Now that he has saved the country, as opined by some commentators as we enjoy high unemployment, no real job growth and a GDP that is reminiscent of Jimmy Carter, we can get ready for the next round of really big tax increases as we all enjoy the benefits of the new health care law and all of its “free” benefits that await us.

    • ReaperComing says:

      HRGUy you and i could be brothers we think so much alike, you hit it on the head again!

    • Fed_Peasant says:

      I prescribe a glass of rum, for your anxieties.  A second dose may be necessaary.  It is very therapeutic for me!  I only add ice cubes, in most treatments.  You will take control of your anxieties, & feel much better!! 

  11. A A says:

    No cuts more taxes. As Gomer Pyle would say  Surprise,  Surprise, Surprise!   

  12. Dsmith says:

    dumb dumb & dumber

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