With only a few hours before the deadline of midnight on tax increases and spending cuts automatic Senate leaders reached a bipartisan agreement to avoid some, but not all austerity measures that take effect Tuesday .
After two hours after the deadline, the Senate approved a formal law. The deal was at stake, however, provides for a vote scheduled for Tuesday in the House controlled by Republicans representatives. Members of each mode defendant, too.
Without the agreement of all taxpayers in the United States are facing steep inevitable. They will be accompanied by cuts in federal spending programs, from welfare, including unemployment benefits.
Technically, the United States has passed the cliff, but if the House approves the settlement, the economic damage will be relatively minor and transient. The objective will be approved by Congress on Wall Street opened Wednesday.
Senate Minority Leader Mitch McConnell, a Republican, Vice President Joe Biden, has prepared an agreement after two months of talks between President Barack Obama and other congressional leaders have failed.
This agreement will allow tax rates, rising incomes over $ 450,000 to delay the automatic reduction of the federal budget over the next two months.
Deductions and tax credits will be phased income of $ 250,000, the defeat of the Republican Party, which has resisted higher taxes on the rich.
"Last month, Republicans in Congress have said they would never have agreed to increase the tax rate on the richest Americans," Obama said at a press conference held at the hurry. "Clearly, the agreement under discussion would increase taxes and increase the good."
Review of "Cliff" is much more acceptable to Republicans. VAT automatically at midnight, Republicans, ideologically against raising taxes actually voted to eliminate, at least for all but the richest 2% of taxpayers.
Earlier Monday, surrounded by the White House called ordinary Americans, Obama said that these people can not afford a tax increase - an average of $ 2,000 for each American taxpayer - would result in an agreement if n ' was not reached. "The economy can not afford," he added.
Obama said that under the agreement was not to increase taxes for most Americans. Unemployment benefits, aid for college, and tax incentives for clean energy companies are all protected.
Raising taxes imposed only on those who earn $ 450,000 a year or more. Democrats insisted on $ 250,000, while Republicans want to limit those earning $ 1 million or more.
The Democrats seem to have reliable protection for unemployment benefits continuously, the Republicans wanted to cut. Democrats insist on automatic spending cuts across the board postponed for at least several months.
Obama said he would rather have a "big deal" that appeals to wider economic problems of the United States, particularly its huge deficit. But, showing his frustration with Republicans, who control the House of Representatives, said that this is not possible with this Congress.
This is the first Congress met in New Year's Eve 1995, when Washington faces another Democratic Republican economic comparison.
Obama, however, won a second term, desperately need a win against the Republicans to avoid a second mandate to destroy repeated comparison with the Republicans in Congress.
The danger for the Obama administration in this comparison is that the combination of tax increases and a sudden reduction in government spending will have a negative effect on the slow growth of the country out of recession. Countries that depend on trade with the United States may also be affected.
Democrats have no problem finding a bill in the Senate, where it has the most, but the house is much more difficult, given the size of the Republican majority. The Obama administration hopes that the combination of Democrats and moderate Republicans happen.
Republicans and Democrats have fought since the re-election of Obama in early November to find a compromise. Democrats want to see higher taxes for the rich and the Department of Defense to take the brunt of the spending cuts. Republicans have insisted on going support social spending.
Obama and House Republican leader John Boehner, approached the "big deal" in the period before Christmas, but the talks failed. Boehner blamed Democrats have the support of Tea Party-backed Republicans in the House, and Boehner accused Obama has not made enough concessions on taxes and spending.
Baton after Christmas has been approved in the Senate Harry Reid and his fellow Republican Mitch McConnell. But talks between the two broke down last weekend.
Were negotiations between McConnell and Vice President Joe Biden, longtime friends who negotiated throughout Sunday and Monday from resume at dawn.
Without this agreement, a person earns $ 100,000 a year would face a tax increase to $ 5,314 and draconian spending cuts will be introduced in all areas, including military spending and benefits.
With the war in Iraq and the U.S. business involvement end of combat in Afghanistan, the Pentagon is vulnerable to spending cuts, including expensive equipment. If no agreement is in force on 1 January, the Pentagon, in a first time, it must communicate its 800,000 staff to prepare the necessary time to save money.
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