With effect date of start of the year 2013, the House of Representatives voted Tuesday night passing a bipartisan deal to avoid the much feared fiscal cliff and associated austerity measures. Despite final vote tally stood 257 to 167 in favor, a majority of Republican House member were against the bill with a total of 151 Republicans votes, combined with 16 Democrats votes against the bill. After the approval of the bill from the Senate, the bill now would be signed by the President of the United States, Barack Obama.

The major highlights of the deal are raising tax rates on upper-level household incomes, extending unemployment benefits and delaying across-the-board spending cuts for two months. In addition, the deal also lets a 2 percent payroll tax cut lapse. Amid approval of the bill, now the tax rates will rise to 39.6 percent from current 35 percent on individual incomes of more than $400,000 and on couples’ income over $450,000. Regarding U.S. borrowing limit, the deal has nothing to address.

The key issue of fiscal cliff, i.e., spending cuts regime, has been delayed for additional two months. The same, i.e., automatic spending cuts was agreed to during the 2011 debt-limit debate. The total of cuts is expected to be around $1.2 trillion over a decade concerning Pentagon spending and other federal outlay spending in combined. Despite the deal on cuts has been reached, replacements of spending cuts with other forms of cost-cutting measures is forecasted to be addressed in the upcoming debate concerning extension of the debt ceiling.

Analysts have projected that the deal to add $4 trillion to federal deficit over the next decade amidst delayed fiscal cliff’s spending cuts.

As the deal on fiscal cliff has reached, the Asian markets have extended gains with Hong Kong’s Hang Seng Index trading 1.9 percent higher and Australia’s S&P/ASX 200 rallying by 1.2 percent.

In line with improved U.S market sentiments, the American dollar has gained on post-deal trading session, exhibiting market optimism. With the deal, avoiding the much feared fiscal cliff, the entire global economy now can be relieved on much stabilized market, at least for the time being.