US President Barack Obama headed back to Hawaii on Wednesday and a Christmas holiday he cut short to help finalise a last minute fiscal cliff deal.
During a late night session, Congress passed a Senate-backed bill, revising drastic tax hikes and spending cuts which economists feared could spark a new recession.
Obama said it was the right deal for the country: “Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest two per cent of Americans, while preventing a middle class tax hike that could have sent the economy back into recession and obviously have a severe impact on families across America.”
The deal will bring in an extra 600 billion dollars in taxes from the rich over ten years.
But ordinary Americans won’t be left unscathed as a previous payroll tax cut – enacted to stimulate the economy – has now ended.
Despite the need to keep consumers spending, neither the Republicans or Democrats have fought to extend it.
As for the planned spending cuts, they’ve only been delayed for two months to allow for a new deal.