Cliff Averted: After bitter New Year brinksmanship, the U.S. Congress finally backed a
deal to avert a "fiscal cliff" of tax hikes and massive spending cuts
that had threatened to unleash economic calamity.
The House of
Representatives passed a deal between the White House and Republicans
late Tuesday to raise taxes on the rich and put off automatic $109
billion budget cuts for two months, lifting the clouds of immediate
But more hard haggling is due in two months' time over further specific budget measures.
deal's fate had hung in the balance for hours as House conservatives
sought to add spending reductions to a version passed by the Senate in
the early hours of 2013 that would likely have killed the compromise.
the end, the House voted 257 votes to 167 to pass the original bill
with minority Democrats joining a smaller band of majority Republicans
to pass the legislation after a fiercely contested and unusual session
on New Year's Day.
Had the deal fallen apart, all Americans would have been
hit by tax increases and the spending cuts would have kicked in across
the government, in a combined $500 billion shock that could have rocked
the fragile recovery.
Relief was felt internationally.
stock markets soared Wednesday, making a bright start on the first
trading day of 2013, as investors welcomed news that the United States
has clinched the deal.