House passes bill, averts fiscal cliff
AP and AFPA weary Congress sent U.S. President Barack Obama legislation to avoid the economy-threatening fiscal cliff of middle-class tax increases and across-the-board spending cuts late Tuesday night hours before financial markets reopen after the New Year's holiday.
January 3, 2013, 12:02 am TWN
The bill's passage on a 257-167 vote in the House of Representatives sealed a hard-won political triumph for the president less than two months after he secured re-election while calling for higher taxes on the wealthy.
Moments later, Obama strode into the White House briefing room and declared, “Thanks to the votes of Republicans and Democrats in Congress I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing tax hikes that could have sent the economy back into recession.”
He spoke with Vice President Joe Biden at his side, a recognition of the former senator's role as the lead Democratic negotiator in final compromise talks with Senate Republican Leader Mitch McConnell of Kentucky.
US stocks shot up Wednesday on news of a fiscal-cliff deal.
A half hour into trade, the Dow Jones Industrial Average was up 263.18 points (2.01 percent) at 13,367.32.
The tech-rich Nasdaq Composite added 75.27 points (2.66 percent) at 3,099.78, while the broad-market S&P 500 gained 30.24 (2.12 percent) at 1,456.43.
In the first trading day of the new year, Wall Street joined a global equities rally celebrating the passage of the bill. The Wall Street rally reflected a sense of relief that the tax deal should help keep the US economy from slipping back into recession, said Patrick O'Hare of Briefing.com.
“Still, it seemingly ignores the fact that the tax deal, which did not include an extension of the payroll tax cut, is going to be a drag on the economy.”
All 30 Dow members were in positive territory.
Stocks around the world started 2013 with hefty gains.
In Europe, the FTSE 100 index of leading British shares jumped 2.44 percent to 6,041.81, its first foray above the 6,000 mark since July 2011. The CAC-40 in France rose 2.27 percent to 3,723.86 while Germany's DAX was up 2.08 percent at 7,771.06.
Spain's stock market rose more than 3.0 percent Wednesday in relief at US lawmakers' deal to avert austere budget measures in the world's biggest economy.