WASHINGTON — President Barack Obama and Senate Republicans reached a sweeping deal late Monday that would let income taxes rise significantly for the first time in more than two decades, fulfilling Obama's promise to raise taxes on the rich and averting the worst effects of the "fiscal cliff."
Vice President Joe Biden arrived at the Capitol just after 9 p.m. to explain the details of the pact he negotiated with Senate Minority Leader Mitch McConnell, R-Ky. A Senate vote on the package could be held by 10:30 p.m., beating a midnight deadline, Democratic aides said. The Republican-controlled House will begin considering today, with a final vote expected in the next day or two.
The agreement emerged after White House officials gave in on the last contested issue, yielding to GOP wishes on how to handle estate taxes, aides said.
The revelations about the pending deal came after President Obama had said a deal was "within sight," and House Republican leaders announced they would hold no votes Monday night, making it appear that the nation would go over the fiscal cliff for at least a day.
The Senate was moving, however, toward a late-night on the agreement negotiated by McConnell and Vice President Biden. With the House likely to reconvene at noon today, a deal appeared imminent that would cancel historic tax hikes for most Americans.
"I think it's highly likely that some time this evening there'll be a vote on the Senate side," Sen. Bob Corker, R-Tenn., said Monday evening as he emerged from a meeting with fellow Republicans and signaled that talks are continuing. "This is one of those things that could well go into the early morning by the time it goes to a vote. ... I think they're attempting to get the legislative language in order and vote on it tonight, you know, 1, 2, 3, 4 in the morning, whatever."
Regardless of whether an agreement is reached to avoid the fiscal cliff, many Americans are all but certain to face a broad hike in taxes starting today because of the expiration of the payroll tax cut, which was enacted in 2011 as a temporary measure to boost economic growth. The increased payroll taxes, combined with hikes affecting the very wealthy, would effectively mark the end of a prolonged period of declining taxation.
The announcement that the GOP-controlled House would not vote on New Year's Eve came after Obama urged lawmakers to "stop taxes going up for middle-class families, starting tomorrow," and he called on them to remain focused on the needs of the American people rather than politics.
In what the White House billed as an event with middle-class Americans, Obama said there were "still issues left to resolve" in the talks.
Obama said the potential deal that Biden and McConnell are crafting would prevent federal income taxes from rising on middle-class families, extend tax credits for children and college tuition, provide tax breaks to clean-energy companies and extend unemployment insurance for 2 million Americans.
He would have preferred to "solve all these problems in the context of a larger agreement," the so-called grand bargain, that would have dealt with spending in a "balanced way," he said.
"But with this Congress, that was obviously a little too much to hope for at this time," Obama said, adding that perhaps "we can do it in stages."
Congressional Republicans immediately pushed back, objecting to comments that one GOP senator described as "heckling Congress."
The president made the remarks as negotiators moved closer to a deal but were still hung up on spending, with Democrats so far resisting Republican proposals for spending cuts that would come in exchange for delaying automatic spending cuts at federal agencies for just three months.