The Senate scraped together a deal to stop the US careering over the so-called fiscal cliff in the early hours of New Year's Day.
The House of Representatives was still debating the Bill as the Star went to press.
Around $536 billion (£330bn) in tax increases and $110bn (£70bn) in spending cuts, about 8 per cent of the annual budgets for most federal departments, were scheduled to go into effect this month.
They would have almost certainly pushed the US back into recession.
The deal, which has not been endorsed by Republicans in the house, raises income tax rates over $400,000 (£250,000) for individuals and $450,000 (£280,000) for couples. Democrats had pushed for the bracket to start at $250,000 (£150,000).
It also blocks spending cuts for two months, extends unemployment benefits for the long-term jobless and prevents a 27 per cent cut in fees for doctors who treat Medicare patients.
The compromise was scrambled together by Vice-President Joe Biden and Senate Republican leader Mitch McConnell. It passed 89-8.