How the Fiscal Cliff Deal Affects You - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

How the Fiscal Cliff Deal Affects You

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On Tuesday night the House of Representatives gave final passage to a bill that would avoid the fiscal cliff.

The bill avoids income tax increases for most Americans, but it was a last-minute compromise that left both Republicans and Democrats disappointed.

"I hate this agreement," North Dakota Senator Democrat Kent Conrad said. "I hate it with every fiber of my being."

Lawmakers getting ready to leave Washington aren't exactly proud of the deal that will prevent a middle class tax hike and delay automatic spending cuts.

Marc Goldwein of the Committee for a Responsible Federal Budget said Congress missed an opportunity to tackle the ballooning federal debt.

"This problem isn't going away." Goldwein said. "They are going to have to keep working at it until they get it."

The bill raises taxes on families making more than $450,000 a year and extends long-term jobless benefits for one year. But the law does not include spending cuts or Social Security and Medicare reform, leaving many lawmakers doubtful that Congress will ever reach a sweeping budget deal.

"Quite frankly," Ohio Republican Representative Steve Latourette said, "the president won't show the leadership to make the move on the entitlement side, and we've been slow to the dance on the revenue side."

And another showdown is just around the corner. In two months the treasury will need to increase the amount of money the country can borrow, and lawmakers must approve it.

"I am most worried about what is happening next," California resident Lisa Fredette said. "After this, I think we have another cliff to go over, and that's really scaring me too, with the debt ceiling."

The last time Congress fought over the debt ceiling, America's credit rating was downgraded.

While income tax rates for most Americans will not go up because of the fiscal cliff deal, everyone can still expect paychecks to be a little bit smaller, because the payroll tax was allowed to rise two percent.

Those making $30,000 a year will pay about $50 more per month in taxes.  Those earning $50,000 a year will contribute about $83 more each month. Those making about $115,000 a year will pay about $200 more per month. The payroll tax is used to fund Social Security.

It is also important to note that the fiscal cliff bill does extend unemployment benefits for 25,000 Nevadans through the end of this year. State officials said eligible recipients were notified to keep submitting weekly claims despite the uncertainty in Congress, so that their benefits wouldn't be interrupted.

Written by Arianna Bennett & CBS Staff
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