The White House and congressional Republicans have reached an agreement to avert the so-called fiscal cliff of tax hikes and spending cuts.
The Senate subsequently approved the agreement in the form of a piece of legislation.
House of Representatives Minority Leader Nancy Pelosi and Democratic Senate Majority Leader Harry Reid had signed the agreement to prevent the looming fiscal cliff on Monday.
Reports say the agreement would raise taxes on the richest Americans, while exempting others who earn less than USD 450,000 a year. The deal will also put off USD 109 billion in budget cuts for two months.
Steep tax hikes and deep spending cuts were due to come into force on January 1, if no agreement was concluded. Now, all eyes are on the House lawmakers to vote on the deal on New Year’s Day in order to prevent the worst of the fiscal cliff’s effects.
The US Treasury Secretary Timothy Geithner said on December 27 that “the country hit its debt ceiling.” America’s debt currently stands at over USD 16 trillion.