Washington: A full day after the New Year deadline, the U.S. Congress has approved a deal to avoid the worst effects of the so-called fiscal cliff, a mix of $ 6 billion in automatic tax increases and spending cuts.
Without the compromise deal the fiscal cliff, analysts feared, could spark a new recession with the resulting reduction in consumer spending.
Shortly after the passage of the deal brokered by Vice President Joe Biden, Obama delivered a statement at the White House, saying he will sign the legislation, but made clear the government still needs to take a balanced approach on reducing the deficit.
"While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they passed," Obama said, referring to the upcoming debt ceiling debate.
"I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing a middle class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America," he said.
The central premise of his campaign for president was to change the tax code that was "too skewed towards the wealthy at the expense of middle class Americans," Obama said.
"Tonight we have done that," he added, thanking the leaders of the House and Senate.
With the deal done, the White House announced Obama will depart late to resume his vacation in Hawaii. He left his family on the island last week, putting his vacation on hold and returning to Washington to deal with the fiscal cliff negotiations