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Obama hails 'fiscal cliff' deal

  • U.S. President Barack Obama has hailed a deal to prevent a "fiscal cliff" of tax increases and spending cuts.

    Obama spoke on Tuesday after the House of Representatives passed a Senate-backed bill by 257 votes to 167.

    The bill raises taxes for the wealthy and delays spending cuts for two months.

    Pressure was mounting for the vote to be passed before financial markets reopened later today. 

    Tuesday night's house vote saw 172 Democrats and 85 Republicans vote in favor of the bill.

    It was passed in the Senate less than 24 hours earlier by 89 votes to eight following talks between Vice-President Joe Biden and Senate Republicans.

    The "fiscal cliff" measures came into effect automatically at midnight on Monday after George W. Bush-era tax cuts expired.

    The January 1 deadline led to tax increases of around $536 billion and spending cuts of $109 billion from domestic and military programs.

    According to economists, the full effects of the fiscal cliff could have led the U.S. back into recession.