After a marathon session of negotiations that went down to the wire, the U.S. Senate moved to bring the country back from the brink of the fiscal cliff.
The Senate voted 89-8 in favour of a deal, which would raise taxes on the wealthy while maintaining low middle-class tax rates, to avert the fiscal cliff.
While the deal technically wasn’t voted on, signed and sealed before the midnight deadline, with the New Year holiday there will be little real-world effect.
The bill still needs support of the Republican-controlled House of Representatives, however.
Assuming the bill is passed through the House, it will prevent a sweeping group of spending cuts and unanimous tax-hikes that were set to automatically come in effect.
Obama said the deal is “the right thing to do” for the U.S., adding that he’s encouraging the House to “pass it without delay.”
The agreement extends the Bush-era tax cuts for individuals making under $400,000 and households making under $450,000.
It would also raise the estate tax for people valued more than $5 million dollars.
It also extends unemployment benefits for one year for approximately 2 million Americans.
The automatic spending cuts will be postponed for 2 months and paid for by other spending cuts, giving lawmakers more time to plan how to tackle the nation’s massive debt.
The next big deadline will likely come around the end of February, when the Treasury Department will have to come up with some sort of plan to increase or extend the nation’s $16.4 trillion debt ceiling.