WASHINGTON, Jan 1: The US Senate on Tuesday endorsed a plan to avert fiscal cliff and sent it to the House of Representatives with a strong bipartisan vote, making it difficult for the House to reject it.
Eighty-nine of the 100 senators voted for the measure while only 8 voted against it, which seeks to head off tax increases on working Americans.
The White House hopes that the big bipartisan vote for the compromise formula will encourage the House to approve it as well and the plan will arrive at President Barack Obama’d desk by Wednesday for signature.
However, House Speaker John Boehner, a Republican has refused to rule out the possibility the House could amend the plan and send it back to the Senate for reconsideration.
The House began in-camera deliberations on Tuesday afternoon but experts appearing on various US television channels predicted a long and rancorous debate.
Economists have warned that failure to pass the compromise formula could send the United States back into a recession.
The new Congress convenes in two days and if the House rejects the plan, it will also undo the Senate vote and the legislative process will have to start afresh.
The House has three options: reject the compromise, pass it as written by the Senate or amend and return it to the Senate for reconsideration.
If returned for reconsideration, the measure may not become a law in the current Congress which completes its tenure in two days, as the Senate will then have to send it back to the House for passage. It will be difficult to complete the entire process before the new Congress convenes.
In the new Congress, the Democrats will have a stronger position in the Senate but the Republicans will still control the House, which may unleash a lengthy legislative battle that may bring back the recession.
Experts warn that deep spending cuts the Republican demand may also have a negative impact on the national economy.
Despite such warnings, House Republicans made little effort to conceal their dislike for the Senate plan, saying that while the formula does accommodate some of their demands, it still favours the Democrats.
Conservative Republicans are dismayed the compromise raises tax rates and doesn't include more cuts in federal spending.
House Democrats also have reservations about the bill, saying that it gives too many concessions to the Republicans.
Senator Tom Harkin, a Democrat, said the bill benefited the wealthiest Americans at the expense of those who could afford it least.
“Maybe now we are all believers of trickle-down economics. Not I,” said Mr Harkin, declaring that he would vote against the legislation.
The fiscal cliff, which includes automatic tax increase and spending cuts, is linked to America’s rising public debt, which stood at $16.351trillion on Jan. 1, 2013, which translates into more than $52,000 per person.
The US national debt has continued to increase by an average of $3.82 billion per day since September 28, 2007.
America’s budget deficit -- the difference between its earnings and expenditures -- as a share of national income is exceeded only by Greece and Egypt among all of the world’s major countries. The current deficit is estimated at 9.1 percent of the GDP.