Pressure on Lower House to agree to fiscal deal

Updated January 02, 2013 11:43:30

The US House of Representatives is debating a bill to avert the so-called fiscal cliff, after the Senate overwhelmingly voted in favour of a deal.

After months of agonising over the crisis, weeks of debate about a possible solution, and days of intense, closed-door negotiations, members of the US Senate voted 89-8 early on New Year's Day (US time) to pass the bill.

In a rare show of unity, the Senate voted 89 to eight to raise some taxes on the wealthy while keeping income taxes low on more moderate income voters.

The vote came so late that the United States has technically fallen over the fiscal cliff - but with the January 1 public holiday, the stock market is closed and politicians have some breathing space.

The deal is now in the hands of the Republican-controlled House of Representatives, which has to decide whether it too will agree to raising income taxes on the wealthiest Americans for the first time in 20 years.

What is the fiscal cliff? Read our explainer

This morning the leader of the Democrats in the House, Nancy Pelosi, said both sides had made "gigantic progress" in talks towards a deal but said the onus was now on the Republican leadership.

"I hope we can have a bipartisan agreement as we go forward but, as I said, our members are making their decision now and we look forward to hearing what the Republicans have to say," she told reporters.

However soon after Ms Pelosi's comments, Eric Cantor, the Republican leader in the House, told reporters he did not support the bill, following a closed-door meeting with his party colleagues.

Earlier the Republican's deputy whip, Tom Cole, had predicted the deal would pass the House.

"Like every other deal, people can quibble with the individual items but I think, given the alternatives, this is not only an excellent deal, it's something honestly Republicans can be pleased with.

"It's a compromise on both sides and I don't think it's going to have a difficult time getting passed."

They have to make two decisions - one is whether or not they're actually going to try to make any changes to the deal that the Senate passed overwhelmingly last night.

The second thing is they've got to decide whether or not they're actually going to put it to a vote today, or whether they're going to delay it to tomorrow to have enough time to consider what might need to be done.

They have a bit of breathing space because today the US stock market is closed for the New Year's holiday. But if there's no vote in the House, by the time we get to the market's reopening tomorrow, that is another kettle of fish.

North America correspondent Kim Landers

Earlier, US president Barack Obama released a statement urging the House to "pass it without delay."

If the measure is agreed by both chambers of Congress, it would hand Mr Obama a victory by hiking tax rates on households earning over $US450,000 a year, but exempt everyone else.

"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," Mr Obama said in his statement.

The deal puts off $US109 billion in budget cuts across the government for two months, but in the process sets the stage for a new showdown between Mr Obama's Democrats and Republicans in dysfunctional Washington at the end of February.

"There's more work to do to reduce our deficits, and I'm willing to do it," Mr Obama said.

Late-night deal




Mr McConnell said his party had prevented massive tax rises.

"I know I can speak for my entire conference when I say we don't think taxes should be going up on anyone," he said.

"But we all knew that if we did nothing they'd be going up on everyone, today. We weren't going to let that happen."

Democratic US Senate leader Harry Reid said that although Democrats had not got the deal they wanted, they had managed to protect vulnerable Americans.


"Middle class families will wake up today to the assurance that their taxes wont go up $2,200 each.




First posted January 02, 2013 01:30:12