WASHINGTON -- Three hours shy of the midnight deadline, the White House and congressional leaders reached a deal to avert the so-called fiscal cliff, several sources confirmed to The Huffington Post.
Under the deal brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.), Congress would permanently extend the Bush income tax cuts at $400,000 and below, keep the estate tax threshold at $5 million and extend unemployment benefits for one year.
It would also temporarily delay the sequester -- i.e., billions of dollars in across-the-board spending cuts -- for another two months. The cost of continuing current spending levels will be paid for through an even mix of tax revenue increases and later spending cuts. Half of those cuts will come from defense spending; half will come from nondefense spending.
The deal includes other tax provisions as well: It extends the child tax credit and the college tuition credit for five years, individual and business tax extenders for two years, and the Medicare "doc fix" for one year. The Alternative Minimum Tax will be permanently fixed. The agreement also extends the farm bill for one year.