A last-minute deal was reached to avoid the “fiscal cliff,” which would have combined the scheduled expiration of tax cuts with an automatic $1.2 trillion in spending cuts to defense and domestic programs. Congressional leaders voted to permanently extend the Bush-era income tax cuts for single earner taxpayers with annual incomes below $400,000 and married couples with annual incomes below $450,000, maintain the estate tax threshold at $5 million, and extend unemployment benefits for one year. The deal also extended the Medicare “doc-fix” for one year to avoid linking Medicare providers’ salaries to the sustainable growth rate (a formula that would result in substantial pay cuts for such providers). In addition, the deal delays spending cuts, also called “sequestration,” for two months – making the next major deadline for a deal March 1st. All that is known at this point is that half of spending cuts will come from defense spending and half from nondefense spending. Stay tuned for how spending cuts may impact healthcare and federal programs supporting healthcare improvements.