US House moves towards vote on 'fiscal cliff' deal
A US Senate-backed deal to stave off a "fiscal cliff" of drastic taxation and spending measures has passed to the House of Representatives.
President Barack Obama has urged the House to pass the bill "without delay".
The House was preparing to vote on the bill late on Tuesday, despite earlier Republican calls for it to be amended to include more spending cuts.
There is intense pressure for a vote in the House before financial markets reopen on Wednesday.
The move towards a House vote came after it became clear Republicans were not going to be able to push through the spending cuts amendment.
The bill passed a procedural vote late on Tuesday evening, and a vote on the bill itself is expected shortly.'Cannot wait'
After a meeting of Republicans earlier, the House majority leader, Eric Cantor, said : "I do not support the bill."
Brendan Buck, a spokesman for the speaker of the Republican-led House, John Boehner, said: "The lack of spending cuts in the Senate bill was a universal concern amongst members in today's meeting."
What is the fiscal cliff?
- On 1 January 2013, tax rises and huge spending cuts come into force - the so-called fiscal cliff
- The deadline was put in place in 2011 to force the president and Congress to reach agreement on the budget over the next 10 years
- Date coincides with expiry of Bush-era tax cuts
- There are fears that raising taxes while massively cutting spending will have a huge impact on households and businesses
- The fiscal squeeze could also push the US into recession, and have a global impact
But after a second closed-door meeting in the early evening, talk of amending the Senate bill dried up, and a debate and vote was quickly tabled.
After a meeting of the House Democrats, Minority Leader Nancy Pelosi urged Mr Boehner to allow the House to vote on the deal.
"That is what we expect. That is what the American people deserve," Ms Pelosi said.
Democrat representative Steve Cohen said: "My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something."
The current Congress is also scheduled to expire on Thursday. If the House rejects the bill, a new House would have to start all over again.
The "fiscal cliff" measures - cutting spending and increasing taxes dramatically - came into effect at midnight on Monday when George W Bush-era tax cuts expired.
The 1 January deadline triggered tax increases of about $536bn and spending cuts of $109bn from domestic and military programmes.
Few effects were felt immediately, as Tuesday is a public holiday. But economists warn that if the full effects of the fiscal cliff are allowed to take hold, the resulting reduction in consumer spending could spark a new recession.
The Senate-backed bill, which raises taxes for the wealthy, was passed in the early hours of Tuesday by 89 votes to eight after lengthy talks between Vice-President Joe Biden and Senate Republicans.
Spending cuts have been delayed for two months to allow a wider agreement.
In hailing the Senate vote, President Obama had stressed the urgency of a House approval.
He said in a statement: "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."
American politicians certainly know how to take it to the wire - and just a little bit beyond”
The compromise Senate deal extends the tax cuts for Americans earning under $400,000 (£246,000) - up from the $250,000 level Democrats had originally sought.
In addition to the income tax rates and spending cuts, the package includes:
- Rises in inheritance taxes from 35% to 40% after the first $5m for an individual and $10m for a couple
- Rises in capital taxes - affecting some investment income - of up to 20%, but less than the 39.6% that would prevail without a deal
- One-year extension for unemployment benefits, affecting two million people
- Five-year extension for tax credits that help poorer and middle-class families