Passage came nearly 24 hours after a decade's worth of tax cuts enjoyed by tens of millions of Americans expired with the stroke of the new year, technically raising taxes by more than $500 billion in 2013 alone.
Those tax increases â¿¿ plus $109 billion in defense and domestic spending cuts that were to be automatically triggered Wednesday â¿¿ became known as the fiscal cliff. Economists warned that their combined impact would hurl the economy back into recession, but Obama's signature on the bill would prevent the "cliff" from taking hold.
Obama can sign the bill remotely using a machine called an "autopen," or the bill can be flown to Hawaii for his signature.
Overall, the legislation would add nearly $4 trillion to federal deficits over the next decade compared with what would have happened had all the tax cuts expired, according to the nonpartisan Congressional Budget Office."I'm embarrassed for this generation. Future generations deserve better," complained one foe, Rep. Louie Gohmert, R-Texas. The agreement's journey to passage was a tortured one. It included negotiations between Obama and Boehner on a larger, deficit-cutting deal that collapsed, and a failed effort by the speaker to drum up enough GOP votes to pass a "Plan B" that would have limited tax boosts to incomes exceeding $1 million. It took weekend talks between McConnell and Biden, former Senate colleagues, to craft the more modest package that focused on averting the worst impacts of the fiscal cliff while postponing any deficit reduction efforts to coming months. Those first showdowns will come over the next three months, when the government's legal ability to borrow money will expire and temporary financing for federal agency budgets will expire. Republicans have already said that, as they did in 2011, they will demand spending cuts as a condition for extending the debt ceiling.