Leigh Ann Caldwell, Steve Chaggaris
3:47 PM EST, December 31, 2012
Most of the world is counting down to a midnight New Year's celebration while Congress continues to watch the clock and count down to another deadline, despite the efforts of lawmakers to avert the "fiscal cliff."
Those efforts are inching closer to the midnight deadline, but leaders from both parties indicate that a deal is within reach.
President Obama took to the stage with middle-class taxpayers standing behind him this afternoon to announce that Congress is making "progress" and that "it appears an agreement...is in sight."
Senate Minority Leader Mitch McConnell, R-Ky., described the status of the talks even more positively saying he and his main negotiating partner, Vice President Joe Biden, are "very, very close to an agreement."
While he didn't provide details, McConnell said on the Senate floor, "We've reached an agreement on all of the tax issues."
Multiple congressional sources tell CBS News that the two sides have agreed on a permanent income threshold for the expiration of the Bush-era tax cuts for the wealthiest Americans: $400,000 for individuals and $450,000 for families. For weeks, Democrats have pushed for letting the cuts expire for those making over $200,000 and families making over $250,000 while Republicans have wanted to renew the cuts for all Americans, including the wealthiest.
Additionally, agreement has been reached on the estate tax, which was set to increase from 35 percent to 55 percent in 2013. Instead, the compromise sets the new rate at 40 percent with the first $5 million exempt from being taxed.
Other likely components of the deal include an increase in capital gains and dividend tax rates, which would increase from 15 to 20 percent. There would also be an extension of the Earned Income Child Tax Credit, a permanent fix to the Alternative Minimum Tax and a one-year extension of tax credits for renewable energy development. And doctors would be shielded from a massive reimbursement gab for treating Medicare patients.
The entire tax deal would raise about $600 billion, aides said.
Also agreed to is a major sticking point for Democrats: an extension of unemployment benefits for two million Americans whose benefits expired over the weekend.
Vice President Joe Biden and McConnell have been the key negotiators over the past 24 hours and the movement on taxes represents a huge step forward on this last day of talks before the cliff.