The US senators have finally passed a legislation to avoid the automatic changes in the taxes and spending in the US economy.

With a pre-dawn vote of 89-8, the senate will now be able to avoid a combination of automatic tax increases and spending cuts. The law now paves the way for a decision in the House of Representatives, where the vote is expected on Tuesday or Wednesday.

Experts had said that the uncertainty over the issue of fiscal cliff is putting pressure on the economic growth as investors are hindered by prospects of $600-billion in tax increases and spending cuts. President Barack Obama and congressional leaders have both said that they are committed to address the issue by reaching an agreement in time. Economists had urged the government and lawmakers to come to an agreement sooner to help boost economic growth and relieve pressure from the economy.

If the there is not agreement to resolve the situation, a series of spending cuts and tax hikes will automatically take affect from 2, January, 2013. Republicans in the US congress are opposing tax hikes for highest earners and are proposing increasing tax revenue without raising tax rates by limiting tax deductions and closing loopholes.

Senate Republican leader Mitch McConnell said that the agreement should have been reached much earlier and this should not be the way the lawmakers address economic issues.