A series of tax hikes and spending cuts have gone into effect in the US. The Senate is set to vote on a deal to avert the impact of what experts fear will send the country into another recession.
As the clock struck midnight in Washington on January 1st, US lawmakers still had not reached an agreement to avoid sending the country over the fiscal cliff. However, Vice President Joe Biden expressed optimism that the Senate would reach a compromise early on Tuesday.
"I think we'll get a very good vote tonight," Biden told reporters shortly after midnight in Washington.
The US fiscal agreement is set to be voted early Tuesday by the Senate, while the House of Representatives was not due back into session later in the day.
World stock markets are closed for New Year's Day, which gives lawmakers a few extra hours to conclude the deal.
The pact, if agreed by Congress, would raise taxes to 39.6 percent on the richest Americans - those earning over $450,000 (340,960 euros) a year - but exempt everyone else.
The deal will also postpone $109 billion in government budget cuts for two months, top congressional aides said.
Vice President Joe Biden, who had negotiated the deal with the top Republican in the Senate Mitch McConnell, was on Capitol Hill to get Democratic senators on board. Republicans have already indicated their support for the deal.
The new deal is also expected to include an end to a temporary two percent cut to payroll taxes for Social Security retirement savings and Medicare health care programs for seniors. It is also expected to make changes to inheritance and investment taxes.
hc/ccp (Reuters, AFP, dpa)