Economy Jan 1, 2013
Washington: The US Senate on Tuesday, two hours after a December 31 deadline had lapsed, approved legislation aimed at averting the "fiscal cliff" by stopping most tax hikes and across-the-board spending cuts that were due to begin with the new year.
The House of Representatives still must approve the measure, possibly on Tuesday.
Earlier, the White House and congressional lawmakers had reached a deal to avoid the "fiscal cliff" that would delay harsh spending cuts by two months, Obama administration officials said on Monday.
President Barack Obama called Democratic Senate Majority Leader Harry Reid and House of Representatives Minority Leader Nancy Pelosi, who both signed off on the deal, one source said.
The agreement included a balance of spending cuts and revenue increases to pay for the delay in the automatic spending cuts that would go into effect without a deal by lawmakers.
Of those spending cuts, 50 percent would come from defense and 50 percent from non-defense areas, the sources said. The White House viewed that as a victory, one source said, and sees it as a model for future deficit reduction pacts.
Vice President Joe Biden traveled to Capitol Hill to discuss the deal.
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