After months of Senate negotiations, Congress will be unable to vote on a deal to prevent the US from going over the "fiscal cliff" by tonight's midnight deadline, BBC is reporting. This means that, come January 2nd when the markets re-open from the holidays, taxes will officially rise for Americans as automatic spending cuts, called the sequester, go into effect.
Earlier today, President Obama held a press conference to update the public on the Senate's negotiations, saying that a deal is "in sight," but "but they're not there yet." The president was optimistic, however, adding that if there's "one thing we can count on with respect to this Congress, [it] is that if there is even one second left before you have to do what you're supposed to do, they will use that last second."
The Senate is said to be "very, very close," but they are still divided over spending cuts.
Sequestration was created in 2011 as a response to a previous fiscal cliff deal conflict, and, according to the White House budget office, was designed as "a mechanism to force Congress to act on further deficit reduction" - it was never meant to actually go into effect.
There is a silver lining here, however: As Tuesday is a public holiday, no immediate effects of the fiscal cliff will be felt by citizens, and if the Senate is able to close a deal tonight to present to Congress soon, it's likely we'll barely feel the effects of the fall at all. Even better, this outcome seems likely; the only reason that the deal is missing the deadline is because the House has already adjourned for the night, and the Senate is still deliberating.
According to the president, the deal that is currently on the table would prevent a tax increase for many Americans, extend unemployment benefits for about 2 million people, as well as extend the child tax and tuition credits for families and for clean-energy companies. Missing the deadline adds a little bit of a glitch, though - Obama added that now the Senate has to figure out how to lessen any blows from automatic spending cuts that scheduled to begin.
You can watch Obama's earlier press conference above.