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Congress OKs Cliff Deal, Signaling Future Fights

WASHINGTON (AP) – Congress’ approval of a compromise averting a prolonged tumble off the fiscal cliff hands a victorious President Barack Obama most of the tax boosts on the rich that he campaigned on. It also prevents House Republicans from facing blame for blocking tax cuts for most American households, though most GOP lawmakers parted ways with Speaker John Boehner and opposed the measure.

Passage also lays the groundwork for future battles between the two sides over federal spending and debt.

The GOP-run House voted final approval for the measure late Tuesday by 257-167. That came after the Democratic-led Senate used a pre-dawn 89-8 roll call to assent to the bill, belying the partisan brinkmanship that colored much of the path to the final deal.

The tax package negotiated by President Barack Obama and Senate Republicans and passed by Congress will protect 99 percent of Americans from an income tax increase. But that doesn’t mean that most of them won’t see their taxes rise.

In fact, the vast majority of workers will pay higher federal taxes in 2013, largely because a temporary reduction in Social Security payroll taxes expired on New Year’s Day. The tax package did nothing to prevent that from happening.

A nonpartisan Washington research group, The Tax Policy Center, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement. High-income families would get the biggest tax increases, but many middle- and low-income families will pay higher taxes too.

President Barack Obama is back in Hawaii for vacation after a tense, end-of-the-new-year standoff with Congress over the fiscal cliff.

The president arrived early Wednesday morning, local time, after an overnight flight aboard Air Force One. He was rejoining his family for a holiday break after having returned to Washington following Christmas to deal with the unfinished business that threatened to throw the economy back into recession.

The House voted late Tuesday night on a package to avoid income tax increases for most Americans, allowing rates to rise on incomes exceeding $400,000 for individuals and $450,000 for couples. The wide-ranging deal, approved by the Senate earlier, delayed for two months billions in budget-wide cuts.

The White House had no immediate update on when Obama would receive and sign the bill.

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Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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