Obama seals 11th hour Budget deal with Republicans to avert fiscal cliff

President Barack Obama and congressional Republicans have reached a deal to avert the fiscal cliff on the last day of 2012.

The upshot is income-tax rates will rise, unemployment benefits will be maintained and tax breaks for families of modest means.

The deal also delays for two months part of the $US110 billion in spending cuts that otherwise would have taken place in early January.

The Senate votes on the deal tonight( DC time). The House could reconvene, or wait until Tuesday to vote.

The Wall St Journal reports key elements of the deal are:-

Permanently raising tax rates on income over $US400,000 for individuals and $US450,000 for jointly filing couples.
Raising taxes on capital gains and dividends for those households, from the current 15% to Clinton-era levels of roughly 20%.
Limiting the value of personal exemptions as well as the value of itemized deductions, two restrictions that would kick in at $US250,000 for individuals and $US300,000 for couples. Those limits disappeared in 2010.