WASHINGTON
US President Barack Obama signed the bill to prevent the country from "fiscal cliff."
The new bill preserves tax cuts implemented by the former President George W. Bush for individuals earning 400 thousand American dollars and below and for families earning 450 thousand American dollars and below annually and also extends expiring jobless benefits.
The bill was passed by the Senate on Tuesday morning and by the U.S. House of Representatives on Tuesday evening.
Obama instructed the bill to be signed by autosignature since he was on holiday with his family.
"Economic" deadlock in US Politics
Although it seems like the US has overcome the "fiscal cliff" crisis, Obama and the Congress are to face new crises, new disagreements and new "drama" due to the spending cuts and increase in the federal debt limit.
The US returned from the threshold of economic crisis and recession with the last minute deal of the "fiscal cliff" bill.
If Obama and the Congress could not come to an agreement, taxes would increase suddenly, 110 billion dollars of automatic deductions were to take place from Ministry of Defence to Social Security, covering many institutions. In addition, 40 percent of the 5 million people receiving jobless benefits would lose this assistance and the unemployment rate would be above 9 percent.
Although the Republicans in the US Congress opposed to the tax increases for the wealthy and wanted to include spending cuts in the bill, they could not afford to take the risk of economic crisis and supported the bill.
Automatic spending cuts are delayed for two months with the passing of the bill and it preserved tax cuts implemented by the former President George W. Bush for individuals earning 400 thousand American dollars and below and for families earning 450 thousand American dollars and below annually. It boosts the top 35 percent income tax rate to 39.6 percent for households making more than 450 thousand American dollars a year
"Fiscal cliff" might seem like "victory" for Obama who promised tax cuts for the middle class however, the Republicans who were defeated might want to get even in debt limit and spending cut negotiations.
