by Calculated Risk on 1/01/2013 10:53:00 AM

From CBS: Fiscal cliff deal heads to House after Senate vote

Legislation to negate a fiscal cliff of across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies is headed to the GOP-dominated House after bipartisan, middle-of-the-night approval in the Senate capped a New Year's Eve drama unlike any other in the annals of Congress.

CBS News correspondent Nancy Cordes reports from Capitol Hill that the House vote could come as early as 1 p.m. Tuesday.

Of course they are always late.

For details on the bill, see: Wonkbook: Everything you need to know about the fiscal cliff deal

Assuming the bill passes the House (seems likely given the large majority voting for the bill in the Senate), the next question is the size of the drag on the economy. The largest drag will come from the payroll tax cut - also there will be more drag in a couple of months because the sequester was delayed (scheduled budget cuts).

From Sudeep Reddy at the WSJ: Deal's Likely Impact: More Slow Growth

The biggest hit to 2013 growth appears likely to come from the payroll-tax holiday's expiration on Monday.
...
The workers' share of the Social Security payroll tax had been lowered by two percentage points for the past two years, to 4.2% from 6.2%, amounting to an annual income boost of $1,000 for a typical U.S. family earning $50,000 a year.
...
The rise in payroll taxes would amount to about $125 billion a year, or about 0.8% of the nation's overall output, according to J.P. Morgan Chase. According to many forecasters, that would slow the pace of U.S. economic growth by about half a percentage point next year, a sizable amount for an economy growing about 2% a year.