By Kim Dixon and Jeff Mason
WASHINGTON, Dec 31 (Reuters) - The White House and Senate
leaders struck a bipartisan deal on Monday to try to avoid a
'fiscal cliff' budget crisis, although the agreement was likely
to face stiff challenges in the House of Representatives.
Senators were due to vote on the accord before midnight
(0500 GMT Tuesday) and independent Senator Joe Lieberman said it
had strong support from the Democrats who control the chamber.
The agreement still came too late for Congress to meet its
own deadline of New Year's Eve to pass laws halting $600 billion
in tax hikes and spending cuts due to come into force on Jan. 1.
But with Tuesday a holiday, Congress still had time to
draw up legislation, approve it and backdate it to avoid the
harsh fiscal measures coming into force.
That will need the backing of the House where many of the
Republicans who control the chamber complain that President
Barack Obama has shown little interest in cutting government
spending to try to reduce the U.S. budget deficit.
House Republicans are also likely to balk at planned tax
hikes on household incomes over $450,000 a year that was part of
the agreement struck between Vice President Joe Biden and Senate
Republican Minority Leader Mitch McConnell. The House has
convened a session for Tuesday at noon (1700 GMT).
The deal would make permanent the alternative minimum tax
'patch' that was set to expire, protecting middle-income
Americans from being taxed as if they were rich.
Indiscriminate spending cuts for defense and non-defense
spending were simply postponed for two months.
As New Year's Day approached, members were thankful that
financial markets were closed, giving them a second chance to
return on Tuesday to try to blunt the worst effects of the
There is no major difference whether a law is passed on
Monday night, Tuesday or Wednesday. Legislation can be backdated
to Jan. 1, for instance, said law firm K&L Gates partner Mary
Burke Baker, who spent decades at the Internal Revenue Service.
'This is sort of like twins and one being born before
midnight and one being born after. I think the date that matters
is the day president signs the legislation,' she said.
(Additional reporting by Richard Cowan, Mark Felsenthal and
Rachelle Younglai; Writing by Alistair Bell and Peter Cooney)
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Keywords: USA FISCAL/
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