(WallStreet Journal) WASHINGTON—U.S. President Barack Obama and Senate leaders Monday reached a New Year's budget agreement that would let income-tax rates rise for the first time in nearly 20 years, maintain unemployment benefits for millions of people and blunt the impact of spending cuts that were looming as part of the so-called "fiscal cliff."
The long-sought compromise, which will raise taxes on income over $450,000 for couples, was approved by the Senate in the early morning hours Tuesday. The House was expected to consider it later in the day.
"While neither Democrats nor Republicans got everything they wanted," President Obama said in a statement, "this agreement is the right thing to do for our country and the House should pass it without delay." He said it would "grow the economy and shrink our deficits in a balanced way."
Despite concerns raised by some Senate Democrats earlier in the day, the bill was approved by a strong 89-8 vote, with a majority of both parties in support.
One of the most strident opponents was Democratic Sen. Tom Harkin of Iowa. Speaking on the Senate floor shortly before the vote, he declared the compromise benefited the wealthiest Americans at the expense of those who could afford it the least.
"Maybe now we are all believers of trickle-down economics. Not I," Mr. Harkin said, declaring he would vote against the legislation.
The other seven senators voting against the bill were Democrats Tom Carper of Delaware and Michael Bennet of Colorado and Republicans Charles Grassley of Iowa, Mike Lee of Utah, Rand Paul of Kentucky, Marco Rubio of Florida and Richard Shelby of Alabama.
The delay in approval meant that the U.S. technically went over the fiscal cliff at midnight, but with U.S. markets closed Tuesday, the impact of missing the deadline could be minimal. What damage the wrangling has caused—to the 2013 tax-filing season and consumer confidence—is already assured.
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