In the context of large budget deficits, Congress was faced with a variety of policies that were set to reduce spending and increase revenues at the end of 2012. Numerous expiring provisions, across-the-board spending cuts, and other short-term considerations having a major budgetary impact, were scheduled to take effect at the very end of 2012 or in early 2013. This combination of policies, estimated by CBO to reduce the deficit by $502 billion between FY2012 and FY2013, was referred to by some as the "fiscal cliff." Had these policies taken effect, CBO projected that the economy would likely have returned to recession in FY2013. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240 ), which prevented many—but not all—of the fiscal cliff policies from taking effect. Even with the enactment of ATRA, however, there are budget issues that remain unresolved and will likely continue to be debated in the 113 th Congress. Specifically, there are uncertainties associated with the debt limit and with appropriations for the final six months of the fiscal year. The continuing resolution currently funding the operations of the federal government expires at the end of March. Therefore, how government operations will be funded after that date needs to be determined. In addition, under current fiscal policy, an increase to the debt limit would be required in early 2013 to meet existing obligations. Finally, because the federal debt remains on an unsustainable path due to long-term imbalances, it is likely that further debate over appropriate levels of spending and revenues will continue. This report provides a brief overview of the major tax and spending policies that comprised the "fiscal cliff." It discusses how the provisions of ATRA did and did not address these policies and provides information on additional budget-related considerations for the 113 th Congress. A variety of revenue and spending provisions had been set to expire around the end of calendar year 2012. These included the "Bush-era tax cuts" and other related tax provisions, extended emergency unemployment benefits, the Social Security payroll tax reduction, the "doc fix," other tax extenders , and the farm bill. Had Congress and the President allowed all of these measures to expire as scheduled and let the spending cuts under the Budget Control Act of 2011 (BCA) take effect (see discussion below), the budget deficits beginning in FY2013 would gradually have fallen as a percentage of gross domestic product (GDP) reaching sustainable levels between FY2014 and FY2022. However, as a result the extension of certain revenue policies and the postponement of certain spending reductions by ATRA, budget deficits may rise to levels over the next several years that will no longer be considered sustainable. (However, these levels are estimated to be lower than the levels seen over the FY2009-FY2012 period.) Prior to the enactment of ATRA, the budget deficit was estimated to fall by $502 billion between FY2012 and FY2013. As Congress changed the trajectory of these policies by increasing spending and decreasing revenue, these policies have increased the deficit relative to the baseline. Budget changes are measured by the Congressional Budget Office (CBO) relative to "current law" baseline, or the law in place at the time the legislation is being considered. Therefore, as shown in Table 1 , the spending increases and revenue decreases in ATRA are estimated to increase the budget deficit by $330 billion in FY2013 and nearly $4 trillion over the FY2013-FY2022 period relative to current law. Compared to a "current policy" baseline, however, ATRA modestly reduced the deficit because it raised taxes relative to those policies that were in place at the end of 2012. A current policy baseline measures changes relative to policies in place at the time legislation is being considered. For official scorekeeping purposes, policy changes are measured relative to current law. ATRA addressed several revenue provisions that had been set to expire at the end of 2012. These included the "Bush-era tax cuts," provisions related to the estate tax, certain tax provisions enacted or expanded as part of the American Recovery and Reinvestment Act of 2009, the Alternative Minimum Tax (AMT), and a number of temporary tax provisions (also known as "tax extenders"). In addition to these revenue provisions, ATRA also addressed several spending policies that were scheduled to reduce spending beginning in FY2013. These included temporary emergency unemployment benefits, payments to Medicare physicians under the Sustainable Growth Rate (SGR) system, the automatic spending cuts enacted as part of the Budget Control Act of 2011, and the 2008 farm bill. ATRA included a number of tax provisions that directly addressed two components of the "fiscal cliff"—the Bush-era tax cuts and other expiring tax provisions. On a permanent basis, ATRA addressed the Bush-era tax cuts, estate and gift tax, and AMT resulting in a $207 billion reduction in tax revenue in FY2013. ATRA also extended a number of expiring tax provisions resulting in a $74 billion reduction in tax revenue in FY2013. The Bush-era tax cuts included provisions—initially enacted as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27 ) —which reduced income tax liabilities from 2002 to 2010. These tax cuts were extended for 2011 and 2012 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ).The Bush-era tax cuts lowered income taxes in a variety of ways, including by reducing marginal tax rates on ordinary income; reducing tax rates on long-term capital gains and dividends; reduced and ultimately repealed limitations for personal exemptions (PEP) and itemized deductions (Pease); and expanded certain tax credits, including the Earned Income Tax Credit (EITC), child tax credit, adoption tax credit, and dependent care tax credit. The Bush-era tax cuts also contained provisions to reduce the marriage tax penalty, as well as modifying and expanding various education-related tax incentives. ATRA made a variety of changes to these tax provisions. The law permanently extended and in certain cases modified tax provisions originally included in EGTRRA and JGTRRA. Specifically, ATRA permanently extended the reduced tax rates on both ordinary income and capital gains and dividends for taxpayers with taxable income below $400,000 ($450,000 for married taxpayers filing jointly). For taxpayers with taxable income above these thresholds, the marginal tax rate on ordinary income rose from 35% to 39.6% on the portion of their income above these thresholds, and the top tax rate on long term capital gains and dividends rose from 15% to 20%. ATRA also reinstated PEP and Pease for taxpayers with adjusted gross income (AGI) above $250,000 ($300,000 for married couples filing jointly), allowing these limitations on personal exemptions and overall itemized deductions to expire for those with AGI below these thresholds. ATRA also permanently extended the tax changes to a variety of tax credits, the marriage penalty and education-related tax incentives. The Joint Committee on Taxation estimates that the permanent extension of the modified 2001 and 2003 income tax cuts will reduce revenues by $65 billion in FY2013 and $1.53 trillion over the FY2013 to FY2022 period. For additional background information on these tax provisions, see CRS Report R42020, The 2001 and 2003 Bush Tax Cuts and Deficit Reduction , by [author name scrubbed] and CRS Report R42485, An Overview of Tax Provisions Expiring in 2012 , by [author name scrubbed]. EGTRRA enacted provisions to phase out the estate tax over a 10-year period. In 2010, there was no federal estate tax. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 temporarily reinstated, through 2012, the estate tax. As reinstated, the top rate for the estate tax was lower than it had been in 2009 (35%, as opposed to 45%). The exemption amount, as reinstated, was also higher than it had been in 2009 ($5.0 million, as opposed to $3.5 million). Absent legislative action, after 2012 the estate tax would have returned to pre-EGGTRA rules, with a top rate of 55% and a $1 million exemption level per decedent. ATRA permanently extended the estate tax rules established by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, except for the top tax rate which was increased from 35% to 40%. Hence, under ATRA, $5 million of a decedent's estate would be exempt from the estate tax (this threshold is indexed for inflation occurring after 2011 and was $5.12 million per decedent in 2012), and the top rate on estates over this threshold would be 40%. The Joint Committee on Taxation estimates that the permanent extension of the estate tax as included in ATRA will reduce revenues by $334 million in FY2013 and $369 billion over the FY2013 to FY2022 period. For additional information on the estate tax, see CRS Report R41203, Estate Tax Options , by [author name scrubbed]; CRS Report 95-416, Federal Estate, Gift, and Generation-Skipping Taxes: A Description of Current Law , by [author name scrubbed]; and CRS Report 95-444, A History of Federal Estate, Gift, and Generation-Skipping Taxes , by [author name scrubbed]. The Alternative Minimum Tax (AMT) was designed to ensure that higher-income taxpayers who owed little or no taxes under the regular income tax because they could claim tax preferences would still pay some tax.