Obama hails US budget deal

Barack Obama has hailed a deal to avoid a "fiscal cliff" of stark tax hikes and spending cuts. The US House of Representatives backed the bill by 257 votes to 167.

Latest ITV News reports

Report: House Speaker turns White House air blue

John Boehner and Harry Reid
Speaker of the House Boehner (centre) reportedly swore at Senate Majority Leader Reid (right). Credit: Joshua Roberts / Reuters

While the unwelcome f-word in US politics in recent months has been "fiscal cliff", House Speaker John Boehner has been accused of resorting to the traditional swear word in an angry exchange with a political rival near the Oval Office.

After being labelled a dictator by Senate Majority Leader Harry Reid amid the bitter Washington negotiations over the nation's tax hikes and spending cuts, Mr Boehner hit back last Friday, telling Mr Reid: "go f*** yourself", Politico.com has reported.

Multiple witnesses reportedly said Mr Reid appeared startled, asking the Republican: "What are you talking about?"

But Mr Boehner is said to have only repeated his insult, which he apparently later "bragged" about to his party colleagues.

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America avoids fall over 'fiscal cliff' after budget deal

Global markets have reacted with relief after a last-minute budget deal to increase taxes and delay spending cuts in America was approved.

With a fall over the so-called "fiscal'cliff" avoided, the FTSE 100 in London rose above the 6,000 mark for the first time since July 2011.

ITV News Correspondent Paul Davies reports.

Read more: Why America's budget crisis has been averted, but not solved

Markets respond positively to US budget deal

Global markets have responded positively to the US 'fiscal cliff' deal of spending cuts and tax rises.

  • The FTSE 100 Index saw a rise of 1.5% up 93 points to 5990.
  • Hong Kong's Hang Seng index jumped by more than 2% to its highest level in 18 months.
  • South Korea's Kospi rose by 1.7%
  • Australia's ASX 200 rose 1.2%.

Economists had feared that, without action by Congress, the tax increases and spending cuts that technically took effect on New Year's Day would cause unemployment to surge and send the US economy back into recession.

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US 'fiscal cliff' deal: What has been agreed

A look at what has and has not been agreed under a new package of sharp tax increases and spending cuts aimed at preventing the US from going over the 'fiscal cliff':

Agreed

  • Income tax cuts end for individuals earning more than $400,000 (£245,000) year and couples earning more than $450,000 (£275,000).
  • Inheritance tax rises from 35% to 40% after first $5m for individuals and $10m for a couple.
  • Rises in capital taxes from 15% to 20%.
  • Extension of tax credits for low and middle-income families.

Not agreed

  • A far-reaching deal on longer term spending cuts.
  • A deal to increase the debt limit which was reached on Monday.

Source: Financial Times

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