US House Approves Senate's Fiscal Cliff Deal

The House of Representatives voted Tuesday night to approve a Senate bill to avert a feared fiscal cliff, CNN reported.

The measure that sought to maintain tax cuts for most Americans but increase rates on the wealthy passed the Democratic-led Senate overwhelmingly early in the day.

There was discussion about amending the Senate bill by adding spending cuts, but in the end, House lawmakers voted on the bill as written -- a so-called up or down vote.

The legislation would generate an estimated USD 600 B in additional revenue over 10 years, according to various estimates.

"I'd say let's take the Senate deal, fight another day," Rep. Tom Cole, R-Oklahoma, told CNN before the House vote. He predicted the House would pass the bill with a "pretty strong bipartisan majority."

"I'm a very reluctant yes," said Rep. Nan Hayworth, an outgoing Republican representative from New York.

"This is the best we can do given the Senate and the White House sentiment at this point in time, and it is at least a partial victory for the American people," she said. "I'll take that at this point."

The timing of the vote was crucial, as a new Congress is set to be sworn in Thursday.

Under the Senate package, tax rates on income above USD 400,000 for individuals and USD 450,000 for couples would go back to the Clinton-era rate of 39.6%, up from the current 35%, and itemized deductions would be capped at USD 250,000 for individuals and USD 300,000 for couples.

Taxes on inherited estates will go up to 40% from 35%, but the exemption will be indexed to rise with inflation -- a provision the source said was added at the insistence of moderate Democrats.

Unemployment insurance would be extended for a year for 2 million people, and the alternative minimum tax -- a perennial issue -- would be permanently adjusted for inflation.

Child care, tuition and research and development tax credits would be renewed. And the "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.