2013 cheat sheet: What you missed while you were on holiday

While many people are still on annual leave, today marks the day most of us headed back to the daily grind.

Plenty of you will have shunned the news for the past two weeks. But while you celebrated and recharged, plenty has happened that could affect your business and your career.

Here’s the latest on the stories you might have missed.

1) US delays fiscal fight for another day

As 2012 drew to a close, American politicians worked to avoid a crisis of their own making – the ‘fiscal cliff’ they put in place after a bipartisan committee failed to find the cuts needed to curb the nation’s mounting debt.

Working right up to the January 1 deadline, both houses of the American parliament passed a plan that will see federal income tax rise (from 35% to 39.6%) on couples earning more than $US450,000 a year and individuals earning more than $US400,000 a year. Payroll tax has also gone up, from 4.2% to 6.2%, taking $1000 a year out of the pocket of an American earning $US50,000 a year. The deal also locks in $US65 billion in spending cuts (divided equally between defence and non-defence spending) to kick in from March 2013.

The compromise was difficult to achieve. Republicans, many of whom have taken pre-election vows not to increase taxes in any shape or form, struggled to reconcile their position with that of the Democrats, who refused to cut what they saw as vital social spending. A failure to reach a middle ground would have automatically raised taxes on all Americans (to Clinton-era levels) and immediately taken $607 billion out of government spending, which economists said would kill the fragile American recovery.

The bill was negotiated between the White House and the Senate, where it passed 89 to eight. Its passage through the Republican-controlled House of Congress was more difficult – 257 in favour to 167 against. Only one third of Republicans in the House voted for the bill, led by Republican speaker John Boehner who used all his clout to see the passage of the bill. Surprisingly, he was re-elected to his position for another two years only days later.

America isn’t out of the fiscal woods yet. There’s still the matter of the ‘debt ceiling’ – another artificial constraint on American policy-making first introduced in 1940 and raised dozens of times since then – that (currently) prevents the country from borrowing more than $US 16.394 trillion. If America hits this limit, it’ll either default on some of its debt or have to massively cut spending, which won’t do anything good for the faltering global economy.

America was due to hit its debt ceiling on December 31, but some fiddling from the Treasury Department has given its lawmakers another two months to find a solution before they hit the legal limit. Let’s hope they don’t leave it to the last minute again.

2) Rinehart finds an ally at Fairfax as the media company makes a low-key acquisition

Last year saw mining mogul Gina Rinehart agitate for a seat on the board of Fairfax Media, only to be rebuffed (several times) by the board who said they wouldn’t allow her on unless she agreed to sign the media company’s charter of editorial independence.