The US managed to avoid the so called fiscal cliff of steep tax hikes and severe spending cuts after the House of Representatives approved a last minute deal.

The vote, coming just hours before financial markets reopen following the new Year holiday, passed the Senate-backed bill by 257 votes to 167. The deal means tax increases will now only occur to individuals earning over $400,000 and families earning $450,000 or more, and spending cuts have been delayed for another two months.

Nancy Pelosi, Minority Leader in the House of Representatives, spoke of the difficulties of Congress coming to an agreement,

"While we share the same goals we sometimes have different paths to achieving them and reconciling our differences was a monumental task especially with time growing short."

A relieved President Obama told the press that he was glad a solution had been reached, but warned Congress that America still needed to find away to reduce the country's deficit.

"I will not have another debate with this Congress over whether or not they should pay the bills they have already racked up through the laws that they passed. Let me repeat. We can't not pay bills that we've already incurred. If Congress refuses to give the United States government the ability to pay these bills on time the consequences for the entire global community would be catastrophic -- far worse than the impact of the fiscal cliff."

The President could come to loggerheads with Congress once more as early as February, where Mr Obama will be looking to raise the $16.4tn federal borrowing limit so the government can keeping paying its bills, a proposition Republicans are unlikely to agree with unless severe spending cuts are implemented.

Written and presented by Alfred Joyner