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UPDATE: U.S. House will not vote on fiscal cliff compromise tonight

Despite significant progress toward a compromise between party leaders today, the U.S. House of Representatives will not vote on a fiscal cliff package tonight, meaning tax rates will rise on all Americans, at least for now.

The news comes after President Barack Obama said Monday that a deal to avoid the fiscal cliff, the automatic tax hikes and drastic spending cuts due for 2013, was close to being reached.

“There are still issues left to resolve, but we’re hopeful that Congress can get it done,” Obama said at the White House. “But it’s not done.”

After weeks of major setbacks, details of a last-minute deal that would raise $715 billion emerged early Monday morning following late-night negotiations between Vice President Joe Biden and Senate Minority Leader Mitch McConnell, R-Ky.

The compromise deals mostly with the tax side of the cliff while the spending cuts, known as the sequester, remain a point of division. McConnell took to the Senate floor Monday to urge Congress to pass the deal.

“Let’s pass the tax relief portion now, let’s take what’s been agreed to and get moving,” McConnell said, adding that a separate bill could be passed later dealing with the scheduled $109 billion in cuts to the Pentagon and domestic spending.

According to Politico, White House sources said the president is opposed to separating the two issues.

Democrats insist on delaying the sequester for a year and paying for it through new revenue through tax reform and spending cuts. Republicans want to pay for it solely through spending cuts.

Obama said he was cautiously optimistic the gap could be bridged.

“There are still issues to resolve, but we’re hopeful that Congress can get it done,” Obama said.

The deal would raise taxes on income over $400,000 for individuals and $450,000 for couples from 35 percent to 39.6 percent while keeping lower rates the same. Additionally, federal unemployment benefits due to expire would be extended for a year, and the estate tax for properties worth more than $5 million would be set at 40 percent, up from 35 percent.

It would also extend several of the major tax credits for families from Obama’s 2009 stimulus plan for five years and would prevent the Alternative Minimum Tax from hitting 30 million middle-income earners. Dividends and capital gains would be taxed at 20 percent, up from the current 15 percent.

It is not clear if or when the Senate will vote on any agreement.

Speaker of the House John Boehner, R-Ohio, said last week that he would bring any bill that passes the Democratic-controlled Senate to the House for a vote. However, it is unclear if the proposed package would have the votes to pass the House, should it eventually reach the floor.

Republicans had long insisted that tax increases should not be part of any fiscal cliff package. While Boehner and McConnell now appear willing to make concessions on the issue, it could be a hard sell among more conservative members of Congress, many of whom ran on an anti-tax platform.

That being said, most of the tax increases in the deal would technically become tax cuts in the new year following the expiration of the Bush-era tax cuts. This could make conservatives more likely to vote for the package.

Some liberal Democrats are upset with the concessions made by the White House, particularly on income taxes. Obama had campaigned on raising tax rates on income over $250,000.

“No deal is better than a bad deal, and this looks like a very bad deal, the way this is shaking up,” Sen. Tom Harkin, D-Iowa, said on the Senate floor.

Check back with cm-life.com as the story develops.

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