US House passes Obama tax deal

President Barack Obama's sweeping tax cut compromise with opposition Republicans has cleared a final hurdle in the House of Representatives.

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President Barack Obama's sweeping tax cut compromise with opposition Republicans has cleared a final hurdle in the House of Representatives - an uncommon show of bipartisanship after years of political warfare.

Angered by what they saw as overgenerous breaks for the wealthy, liberal House Democrats had threatened to unravel Mr Obama's deal, announced just 10 days earlier, to avert scheduled January 1 tax increases and renew jobless benefits for victims of the worst recession in 80 years.

After Democratic critics forced a delay early in the day, the House battled over the measure late into the night before passing the bill 277-148 at about midnight. The Senate on Wednesday passed it by an overwhelming 83-15 margin.

The measure also will cut federal Social Security pension taxes for nearly every wage-earner and pump billions of dollars into the still-sluggish economy.

The Republican leadership in the Senate had warned that any change to the measure in the House, which would require a new vote in the Senate, would kill the compromise that Mr Obama hammered out with the opposition.

Mr Obama was testing his ability to govern in a far more bipartisan fashion, a new strategy forced upon him by the Republican landslide in November's congressional elections. The opposition party gained a majority in the House and significantly diminished the Democratic majority in the Senate.

In most important legislative votes in the first two years of Mr Obama's term, Republicans had unanimously tried to block the president's legislative agenda.

Many of those who supported a continuation of the tax cuts argued that the package as a whole amounted to a second stimulus. Opponents, however, saw it as an $858 billion addition to the spiraling US debt. None of the provisions in the bill are paid for by savings in other government spending.