The US Senate overwhelmingly approved legislation to avert the "fiscal cliff"
on Tuesday - two hours after a midnight deadline - by stopping most of the tax hikes and across-the-board spending cuts that were due to begin with the new year.
After an 89-8 vote in the Senate, the measure now moves to the Republican-controlled House of Representatives, which is expected to consider it later on Tuesday.
President Barack Obama said
the agreement reached by the Senate is "the right thing to do for our country" and is encouraging the House to "pass it without delay."
He noted that the bill takes a balanced approach to shrinking the US deficit
by "investing in (the) middle class" while "asking the wealthy to pay a little more."
Many Republican House members have already voiced misgivings about the deal's tax hikes on the wealthy and its lack of spending cuts. It is likely to need substantial support from House Democrats in order to pass.
The House is due to reconvene at noon EST (1700 GMT) on Tuesday to take up the measure. However, House Speaker John Boehner said earlier that decisions had not been made on whether he will allow amendments to the bill or hold a straight up-or-down vote.
Without a deal, some $600 billion worth of automatic tax hikes and spending cuts will be triggered in the first days of 2013, threatening a new US recession.
"We don't think taxes should be going up on anyone but we all knew if we did nothing, they'd be going up on everyone today," said Senate Republican leader Mitch McConnell, who negotiated the eleventh-hour deal with Vice President Joe Biden.
"This shouldn't be the model for how we do things around here, but I think can say that we've done some good for the country," McConnell said in remarks just before the vote.