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House Passes Fiscal Deal Late Tuesday

NEW YORK (TheStreet) -- The House of Representatives late Tuesday passed legislation averting a so-called "fiscal cliff" and sent it to President Obama for his signature.

Passage had seemed uncertain earlier Tuesday, after House Republicans, including Rep. Eric Cantor of Virginia, had voiced opposition to the budget compromise that had been hammered out and passed by the Senate.

House leaders had suggested they might amend the legislation to include more spending cuts and then send it back to the Senate, a move that could have led to deadlock.

But the bill passed the House 257 to 167, and among the yes votes were 85 Republicans, The New York Times reported. Sixteen Democrats joined 151 Republicans to vote against the legislation, the Times said.

Passage of the deal, which prevents automatic tax hikes for most Americans and a host of spending cuts, ends a nail-biting period when it wasn't clear politicians icould bridge their differences on fiscal policy.

Economists and financial market participants had expressed concern the tax increases and spending cuts that would have kicked in without a deal could have thrown the still-fragile U.S. economy into recession.

Once it receives Obama's signature, the legislation will increase taxes for individuals with annual incomes of more than $400,000 and couples making more than $450,000 a year but prevent rates from rising on the middle class. The tax rate for these groups will rise to 39.6% from 35%.

Estate taxes will also rise. They will be taxed at a top rate of 40%, an increase from the previous 35% top rate. The first $5 million of an estate's value will be exempt for individual estates, and the first $10 million will be exempt for family estates.

The measure would also block a host of automatic spending cuts for two months, extend unemployment benefits for the long-term unemployed and stop a 27% cut in fees for doctors treating Medicare patients, the AP said.