Update 11:05 p.m. EST: The U.S. House has passed the Senate-approved tax/budget bill, 257-167, which means the United States will avert the worst of the economic and credit market consequences of the fiscal cliff.
President Barack Obama is expected to sign the bill either Wednesday or Thursday in a ceremony.
The bill’s approval represents a victory for President Barack Obama, who campaigned for re-election in 2012 on a promise to raise taxes on the wealthiest but faced intense opposition from congressional Republicans, particularly in the Tea Party faction-dominated House GOP caucus.
Details to follow.
Update 9:45 p.m. EST: House Republican leaders now say a vote on the Senate-approved bill will likely occur at/near 11 pm. EST. There will not be any amendments offered, and it will be an up/down vote on the bill as approved by the U.S. Senate.
Global financial markets were calm, in early Wednesday trading. Tokyo exchanges are closed for a holiday, the Australia stock rose about 0.5 percent, and Hong Kong's Hang Seng Index rose about 1.1 percent
Update 8:03 p.m. EST: House Republicans have decided not to make a spending cut amendment to the Senate fiscal package and instead, will proceed for a vote around 9 p.m., according to CNN.
Concerned about the lack of spending cuts in the Senate measure, the GOP was seeking some $300 billion worth. But reports are that the House leadership is now willing to allow a "clean" up-or-down vote on the bill, which will raise tax rates on the top earners in America.
Rep. Rich Nugent, R-Fla., predicted that fewer than half of House Republicans would vote for the bill without an amendment to add spending cuts, Talking Points Memo reported. He said Speaker John Boehner, R-Ohio, has indicated he would vote for it himself, even though the speaker usually does not vote, but said the speaker isn’t pushing his members to do so, saying they should vote their consciences.
That means the bill will depend on Democratic votes, and Democrats are confident they can muster up the votes to pass the Senate version.
House Minority Leader Nancy Pelosi tweeted the following earlier this evening, "Strong majority of House Ds support bipartisan Senate bill that passed 89-8. Confident it will pass if @SpeakerBoehner allows up/down vote."
Update 7:06 p.m. EST: House Republicans are looking to add an amendment with $300 billion in spending cuts to the Senate's fiscal cliff measure, CNN reports. Earlier Tuesday, Boehner gave his caucus two options: Amend the Senate bill or let it go for an up-or-down vote.
Many House Republicans are troubled that the Senate bill keeps the status quo in spending while raising taxes on the top bracket.
If the House GOP leadership can muster 217 votes to support such an amendment, it will then bring it up for a vote, after which the amended bill would return the Senate. The Senate has left for the day and reconvenes at noon Wednesday.
Amending the bill is a gamble, not only because the Senate has adjourned but it could also decide not to act on the amended bill and let it die when the 112th Congress expires at noon Thursday. The bill is already more than 150 pages. There's no word yet on whether there are any language changes.
House Democrats insisted earlier Tuesday that there are enough votes from their side to pass the Senate bill, if the speaker would let it come to vote.
Update 6:38 p.m. EST The fiscal cliffhanger in Washington weighed on traders on the other side of the world as Asian markets opened, Reuters reported.
"Frankly, we don't know what to make of it all. It's like a circus there," said one exasperated forex dealer at an Australian bank in Sydney.
Update 6:07 p.m. EST: The U.S. Senate adjourned and will reconvene at noon Wednesday, CNN reports. The House continues to deliberate the fiscal cliff measure its Senate counterparts passed early Tuesday morning.
What this means is that should the House amend the measure, the Senate will not be able to act on it until then. Democrats have been pushing for an up-or-down vote from the House.
Update 5:50 p.m. EST House Minority Leader Nancy Pelosi, D-Calif., says Democrats will help pass the fiscal deal -- if Speaker John Boehner, R-Ohio, allows an up-or-down vote.
Whether Boehner will do that however, is doubtful. He seems to be committed to the principle that no measure opposed by a majority of Republicans should be brought to a vote.
Update 5:08 p.m. EST House Republicans are reconvening at this hour for a second meeting of the day, according to several media reports.
They are expected to consider amendments to the Senate-passed fiscal package.
Update 4:52 p.m. EST House Republicans seem determined to send the fiscal compromise back to the Senate with amendments, which probably will send the nation over the "cliff" when markets open Wednesday.
"I’ll be shocked if this isn’t sent back to the Senate,” Rep. Spencer Bachus of Alabama, chairman of the House Financial Services Committee, told reporters after GOP caucus meeting, Talking Points Memo reported.
That would make a passage Tuesday night nearly impossible, say Democrats.
“I don’t know that we can call people back by tomorrow,” Senate Majority Whip Dick Durbin of Illinois told TPM.
The House, he said, has a choice between passing the Senate bill as is or taking the country over the cliff. “At this point I’m afraid so. I don’t see how we avoid it.”
Update 4:06 p.m. ET: House Majority Leader Eric Cantor, R-Va., opposes the Senate-passed fiscal cliff alternative, according to CNN. "I do not support the bill," Cantor told reporters following the House Republican caucus meeting on Tuesday.
If the House Republicans demand amendments, the ball goes back to the Senate, which is unlikely to pass a package before markets open Wednesday.
Republicans are concerned that the bill doesn't include spending cuts, deferring that issue for now. Any amendments to the Senate's measure may address that.
Speaker John Boehner, R-Ohio, did not express opposition or support, but conducted a two-hour conference meeting as an open forum, members told The Hill.
"He [Cantor] said he was not in favor of the Senate bill," Rep. Walter Jones, R-N.C., said. "I think the speaker was as open today as I have ever seen him to the will of what the conference wants."
"This is really the first time I have seen an opposition between the two leaders on something so consequential," Rep. Tim Huelskamp of Kansas said. "I was pretty clear the speaker said we'll do what you want, maybe we'll do it, and the leader [Cantor] said nope, we've got to have spending cuts."
Boehner's hold on his speakership has been in doubt ever since his caucus rejected his "Plan B" bill two weeks ago.
Update 3:06 p.m. ET: House Democrats on Tuesday said they are holding their Republican counterparts to their word that they will give the Senate bill to avert the fiscal cliff a fair hearing.
"That's what [Speaker John Boehner] said. That is what we expect. That is what the American people deserve," said Minority Leader Nancy Pelosi of California. She refused to say just how many votes Democrats would supply to support the deal, however.
House Republicans can either follow the Senate and move forward in a bipartisan way and pass the bill, amend it or reject the deal.
"We are all very eager to see the form that the Republican leadership will put on the floor," Pelosi said.
House members of both parties met New Year’s Day afternoon to consider the bill the Senate passed at 2 a.m. to avert the "fiscal cliff."
The package would increase income taxes – for the first time in 20 years – but the House Republican leadership issued an early morning statement giving no guarantees it will go along.
“The House will honor its commitment to consider the Senate agreement if it is passed,” read a joint statement from Speaker John Boehner of Ohio, Majority Leader Eric Cantor of Virginia, Majority Whip Kevin McCarthy of California and Republican Conference Chair Cathy McMorris Rodgers of Washington.
“Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members – and the American people – have been able to review the legislation," the statement continued.
Vice President Joe Biden, who brokered the deal with Senate Minority Leader Mitch McConnell, R-Ky., was lobbying House Democrats in a meeting that began at noon, NBC reported. Boehner briefing his caucus in a meeting that began at 1, and a vote could be hours away.
Rep. Mick Mulvaney, R-S.C., walking into the first of two closed-door meetings of GOP House members, told Washington Post the bill violated President Barack Obama’s pledge to present a “balanced deal....This raises taxes AND raises spending.’’
Retiring Rep. Steve LaTourette, R-Ohio, a Boehner ally, said he will urge his colleagues to amend the deal. “We should not take a package put together by a bunch of octogenarians on New Year’s Eve,” he said, referring (incorrectly) to Biden and McConnell.
But Rep. Tom Cole, R-Okla., another Boehner ally, said he believed the bill will get enough GOP votes to pass, noting the strong support of Senate Republicans.
In addition raising taxes on the richest – a victory for Obama – the Senate extended unemployment benefits for millions of Americans and voted to delay automatic "sequestration" budget cuts for two months.
The House was under pressure from both sides. The conservative Club for Growth urged Republicans to vote no, and the AFL-CIO leader, Richard Trumka, called on Democrats to reject it, Reuters reported.
After the Senate passage, the president issued a statement:
"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay.
"There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans."
The fiscal cliff deal passed the Senate 89 to 8. The hope is that such bipartisanship will be shown in the lower chamber as well. The dissenters were Sens. Rand Paul, R-Ky.; Marco Rubio, R-Fla.; Mike Lee, R-Utah; Chuck Grassley, R-Iowa; Richard Shelby, R-Ala.; Tom Harkin, D-Iowa; Michael Bennet, D-Colo., and Tom Carper, D-Del.
On Tuesday morning, Rubio offered this explanation for his "no" vote: "I cannot support the arrangement they have arrived at. Rapid economic growth and spending reforms are the only way out of the real fiscal cliff our nation is facing. But rapid economic growth and job creation will be made more difficult under the deal reached here in Washington.
"Of course, many Americans will be relieved in the short term that their taxes won't go up. However in the long run, they will be hurt when employers pass on to them one of the largest tax hikes in decades. Furthermore, this deal just postpones the inevitable, the need to solve our growing debt crisis and help the 23 million Americans who can't find the work they need."
If the Senate bill becomes law, the Bush-era income tax cuts would be preserved for individuals earning less than $400,000 or couples making less than $450,000. The current 35 percent tax rate they now enjoy will revert to the 39.6 percent of the Clinton era.
Additionally, taxes on estate tax will increase from 35 percent to 40 percent on those over $5 million; the alternative minimum tax would be permanently adjusted for inflation to keep millions in the upper middle class from falling under it, and unemployment insurance will be extended for two years; there also are tax credits for tuition, child care, and research and development, and continued reimbursements for doctors who take Medicare patients but not from Obamacare.
Moreover, itemized deductions would be capped for individuals making over $250,000 and for joint filers earning $300,000, as stated in the 150-plus-page bill.
The president and Congress will be dealing with the sequester, or the automatic cuts to domestic and military spending, on March 1. If these cuts take effect, many federal programs face budget cuts of 8 to 9 percent.
But note, the sequester will be dealt with around the same time lawmakers must tackle the debt ceiling, as the Treasury Department will soon hit the borrowing limit again. So Congress would need to wrestle with another issue that otherwise would have been dealt with now.
If the House doesn't approve a plan to avert the approximately $600 billion in tax increase and spending cuts, then, as the Congressional Budget Office warned, America may suffer a new recession and the current 7.7 percent unemployment rate could rise above 9 percent.
Laura is a U.S. politics reporter for the International Business Times. She was always fascinated by the BBC World News each morning on the radio in Jamaica. That, and a love...