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US Senate approves deal on 'fiscal cliff' crisis
WASHINGTON - The White House and top Republicans struck a dramatic deal to avert huge New Year tax hikes and postpone automatic spending cuts that had threatened to send the US economy into recession.
After months of agonizing over the crisis, weeks of debate about a possible solution, and days of intense, closed-door negotiations, members of the US Senate voted overwhelmingly 89-8 early Tuesday to pass a controversial bill that averts the so-called “fiscal cliff.”
It now goes to the House of Representatives, which could hold a vote on the measure later New Year’s Day. US President Barack Obama in a statement urged the House to “pass it without delay.”
If the measure is agreed by both chambers of Congress, it would hand Obama a victory by hiking tax rates on households earning over 450,000 a year, but exempt everyone else from a planned tax increase.
“While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay,” Obama said in his statement.
The deal puts off 109 billion in budget cuts across the government for two months, but in the process sets the stage for a new showdown between Obama’s Democrats and Republicans in dysfunctional Washington at the end of February.
“There’s more work to do to reduce our deficits, and I’m willing to do it,” Obama said.
Vice President Joe Biden, who negotiated the deal with top Senate Republican Mitch McConnell, trooped to Capitol Hill to sell it to Democratic senators, some of whom wanted tax hikes to kick in at a lower threshold.
Had no deal been struck, experts warned that the fragile US economy could have been sent spinning back into recession by the 500 billion combined whack from spending cuts and tax hikes.
In the end, the deal was clinched a few hours before a midnight deadline. The Senate vote came just after 2:00 am (0700 GMT), while the House was not due back into session until Tuesday.
Now it remains for Republican House Speaker John Boehner to rally his restive conservative coalition around the pact, which will likely need some Democratic votes in the House to pass. -- AFP