Senate Approves “Fiscal Cliff” Deal, Crisis Eased

WASHINGTON (Reuters) – The Senate moved the U.S. economy back from the edge of a “fiscal cliff” on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.

In a rare New Year’s session at around 2 a.m. EST (0700 GMT), senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade.

But the measure did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion.

The agreement came too late for Congress to meet its own deadline of New Year’s Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday.

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Senate Leaders To Make Last-Ditch ‘Fiscal Cliff’ Effort

WASHINGTON (Reuters) – President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the “fiscal cliff,” setting off intense bargaining over Americans’ tax rates as a New Year’s Eve deadline looms.

With only days left to avoid steep tax hikes and spending cuts that could cause a recession, two Senate veterans will try to forge a deal that has eluded the White House and Congress for months.

Obama said he was “modestly optimistic” an agreement could be found.  But neither side appeared to give much ground at a White House meeting of congressional leaders on Friday.

What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber’s Republican minority, with reaching a budget agreement by Sunday at the latest.

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Speaker Boehner Succumbs On Tax Deal

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WASHINGTON (Reuters) – House of Representatives Speaker John Boehner on Thursday bowed to pressure from both within and outside his party and agreed to a short-term deal to extend a payroll tax cut for 160 million Americans.

In what could be an end to a toxic stalemate, Boehner informed Senate Majority Leader Harry Reid that he will set a vote in the House on a Senate-passed two-month extension of the payroll tax cut, a Democratic leadership aide said.

Now comes the hard part – getting his often rebellious caucus to follow his lead. He is expected to brief members of his caucus later on Thursday, according to one lawmaker’s office.

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