Washington - President Barack Obama has signed into law a
contentious compromise bill hammered out in Congress that narrowly averted the
US 'fiscal cliff of tax hikes and drastic, immediate cuts in spending, the
White House said early on Thursday.
In a statement, the White House said that Obama late on
Wednesday signed the "American Taxpayer Relief Act of 2012," raising
taxes on households earning above $450 000 and delaying spending decisions for
Officials said the US president, who is on vacation in
Hawaii, signed the measure electronically by autopen.
The "fiscal cliff" crisis was finally averted on
Tuesday as the House of Representatives, by a vote of 257 to 167, approved a
stop-gap agreement passed one day earlier by the US Senate.
The measure dodged across-the-board tax hikes and automatic
spending cuts that had threatened to unleash economic turmoil and perhaps drive
America back into recession.
The hard-fought agreement, seen as a political victory for
Obama, raised taxes on the very rich and delayed the threat of $109bn in
automatic spending cuts for two months.
The respite will prove temporary, however: The Democratic
administration and the Republican-controlled House of Representatives face
several clashes in the coming months on spending cuts and raising the
government debt ceiling.
Had the deal fallen apart, all Americans would have been hit
by tax increases and spending cuts would have kicked in across government - a
combined $500bn shock that could have rocked the fragile recovery.
Relief was felt internationally and markets surged, although
China's official news agency Xinhua warned: "People, or governments, can
overspend for some time, but they simply cannot live on borrowed prosperity