Fiscal Cliff: Averted By Last-Minute Deal!

A full two hours after a midnight deadline, the U.S. Senate overwhelmingly passed a deal Tuesday to avert the feared fiscal cliff of tax increases and spending cut.

The bipartisan bill passed 89-8.

Budget cuts will be put off for two months and income tax cuts for individuals earning less than $400,000 or couples earning less than $450,000 are preserved.

The measure now goes to the U.S. House where it faces an uncertain future in the GOP-controlled body. However, the Senate's margin of passage sends a message.

It is not expected that the House will reject the bill (although anything is possible) and thus allow taxes to rise on almost every single American.

"Glad it's over," said Senate Majority Leader Harry Reid (D-NV) after the vote. "We'll see if the Republicans in the House can become functional instead of dysfunctional."

A statement from House leadership made no promises, though a vote could come as early as New Year's Day. The House is scheduled to convene at noon.

Under the Senate fiscal cliff package:

• Taxes would stay the same for most Americans.
• They will rise for individuals making over $400,000 and couples making over $450,000, with the top rate increasing from 35 percent to 39.6.
• Itemized deductions would be capped for those making $250,000 ($300,000 for couples).
• Taxes on inherited estates will go up to 40 percent from 35 percent.
• Unemployment insurance would be extended for a year for 2 million people.
• The alternative minimum tax - a perennial issue - will be permanently adjusted for inflation.
• Child care, tuition and research and development tax credits would be renewed.
• Reimbursements for doctors who take Medicare patients will continue, but it won't be paid for out of the Obama administration's health care law.
• Milk prices should remain relatively stable.

What's not addressed is the debt ceiling, and the so-called sequester - a series of cuts in federal spending that would have taken effect Wednesday - beyond March 1.

Going over the fiscal cliff would have reduced the budgets of most agencies and programs by 8-10 percent, and Congress will have to resume those talks soon.