But the measure did little to rein in huge annual budget deficits that have helped push the US debt to $16.4 trillion.
The agreement came too late for Congress to meet its deadline of New Year’s Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday.
“While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay,” President Barack Obama said.
If agreed by Congress, it would hand Obama a victory by hiking tax rates on households earning over $450,000 a year. In India, the deal helped Sensex hit a 20-month high, closing at 19,581.