Fiscal Cliff Deferred As Congress Finally Acts

The fiscal cliff has been avoided temporarily as the Congress has passed H.R. 8, the "American Taxpayer Relief Act of 2012" (the "Act"). The Senate passed the Act in the early morning hours of January 1, 2013, by a vote of 89-8. After spending most of the day debating whether to attempt to add additional spending cuts to the Act, the Republican leadership in the House of Representatives finally decided to bring the Senate-passed Act to the floor for a vote. On January 1, just before midnight, the House passed the Act by a vote of 257-167, with 85 Republicans joining 172 Democrats voting in favor of the Act. President Obama signed the Act on January 2, 2013. The provisions of the Act are effective for tax years beginning after December 31, 2012, so there is no gap that resulted from Congress not acting until January 1st.