The White House and top Republicans struck a dramatic deal to avert huge New Year tax hikes and postpone automatic spending cuts that had threatened to send the US economy into recession. After weeks of debate and days of intense, closed-door negotiations, members of the US Senate voted overwhelmingly 89-8 early Tuesday to pass a controversial bill that averts the so-called fiscal cliff.

It now goes to the House of Representatives, which could hold a vote on the measure later New Year’s Day. US President Barack Obama in a statement urged the House to “pass it without delay.”

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

However, with the New Year’s Day holiday, there was no real world impact and members were thankful that financial markets were closed, giving them a second chance to return to try to head off the fiscal cliff.

“If we do nothing  the threat of a recession is very real. Passing this agreement does not mean negotiations halt  far from it. We can all agree there is more work to be done “ majority leader Harry Reid, a Democrat, told the Senate.

AFP and Reuters