U.S. Congress misses "fiscal cliff" deadline despite Senate bill
The U.S. Senate passed a plan to avert the "fiscal cliff" at midnight Monday, which would extend current tax rates for most American households and postpone the automatic spending cuts that threaten a new recession.

The bill came too late for the Congress to meet its deadline of New Year's Eve for passing laws to halt a combination of tax increases and spending cuts totaling more than 600 billion dollars, which strictly speaking came into force on Tuesday.

The bill cleared the Senate with a 89-8 vote, while its fate in the House of Representatives is uncertain.

The agreement emerged at Monday night after a day of intensive negotiations as both parties made last-ditch efforts to bridge differences.

U.S. Vice President Joe Biden, who negotiated the deal with the Senate Republican leader Mitch McConnell, went to Capitol Hill Monday night to build support among senators.

The plan would prevent a tax rate rise on individuals with an annual income below 400,000 U.S. dollars and households making up to 450,000 dollars.

Meanwhile, the start of 1.2 trillion dollars in automatic spending cuts over 10 years, known as the "sequester," would be put off for two months. It had been scheduled to begin with the new year.

Under the deal, jobless insurance benefits for about 2 million long-term unemployed would be extended for a year.

The Republicans dropped their long-term resistance to higher tax rates and accepted a delay in spending cuts, while the Democrats compromised on the income threshold for tax rise and softened their stance on estate taxes.

The plan still needs approval from the House of Representatives that adjourns till Tuesday noon and a vote is expected on Tuesday at the earliest. It is uncertain whether it would get enough GOP support.
Posted by: tipper 2013-01-01