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President Barack Obama has signed the "fiscal cliff" legislation that raises tax rates for top earners and extends tax cuts for the middle class, the White House said.
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.
US market index, the Dow Jones industrial average, has surged 230 points after a budget deal of delayed spending cuts and sharp tax rises averted a fall over a so-called "fiscal cliff".
The Wall Street Journal reports that the Dow Jones shot up 1.8% to 13335 points when the New York Stock Exchange opened.
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.
The FTSE 100 index has broken the 6,000 mark for the first time in 18 months, as the US "fiscal cliff" deal of spending cuts and tax hikes, boosted confidence in the markets.
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.
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':
- 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.
- A far-reaching deal on longer term spending cuts.
- A deal to increase the debt limit which was reached on Monday.
US President Barack Obama acknowledged the new "fiscal cliff" law as one step in the broader effort to strengthen the US economy and increase opportunity.
He said: "The fact is the deficit is still too high and we are still investing too little in the things that we need for the economy to grow as fast as it should."
Latest ITV News reports
America's financial crisis has been averted, not solved. We've had the fiscal cliff. Now get ready for the debt abyss.
Democrats and Republicans have so far failed to agree on an alternative plan to the tax increases and spending cuts scheduled for January 1.