US politicians have stepped back from the fiscal cliff which many feared could prompt a new economic downturn.
Early on New Year's Day, the Democrat-dominated Senate passed legislation to block huge tax increases and spending cuts by an overwhelming 89-8.
A vote in the Republican-led House of Representatives is expected later.
Speaking after the vote US Majority Leader Harry Reid thanked members for their patience.
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.