Little local enthusiasm for fiscal cliff deal

Little local enthusiasm for fiscal cliff deal »Play Video
BOISE, Idaho (KBOI) -- It was hard to find much local enthusiasm on the streets for the "fiscal cliff" tax package Congress passed New Year's Day.

"It's not good news," said Jerry Christian of Boise. "They didn't do enough."

While the compromise deal painfully hammered out by Congress protects 99 percent of Americans from an income tax increase, most of them will still pay more federal taxes in 2013.

That's because the fiscal cliff legislation did nothing to to prevent a temporary reduction in the Social Security payroll tax from expiring.

In 2012, that 2-percentage-point cut in the payroll tax was worth about $1,000 to a worker making $50,000 a year.

The nonpartisan Tax Policy Center in Washington D.C. estimates households making between $40,000 and $50,000 will see an average tax increase of $579 this year.

Households making between $50,000 and $75,000 will face an average tax increase of $822.

Congress may have steered away from the fiscal cliff at the last minute, but another political battle is just around the corner.

Leaders in Washington deferred for two months the $1.2 trillion in across-the-board spending cuts (known as "sequestration") set to hit the Pentagon and domestic programs this week.

Additionally, the bill passed this week failed to raise the debt ceiling, even though the Treasury technically hit the $16.4 trillion limit Monday.

Both of these issues will come to a head just as Congress is expected to vote on a new federal budget. The convergence of these issues practically guarantees that within a matter of weeks, Washington will once again find itself embroiled in another fiscal crisis.