The timing of the vote was crucial, as a new Congress is set to be sworn in Thursday. And without a breakthrough, the entire process would have had to start over.
Specifics of the plan
The legislation will raise roughly $600 billion in new revenues over 10 years, according to various estimates.
According to the deal:
-- The tax rate for individuals making more than $400,000 and couples making more than $450,000 will rise from the current 35 percent to the Clinton-era rate of 39.6 percent.
-- Itemized deductions will be capped for individuals making $250,000 and for married couples making $300,000.
-- Taxes on inherited estates will go up to 40 percent from 35 percent.
-- Unemployment insurance will be extended for a year for 2 million people.
-- The alternative minimum tax, a perennial issue, will be permanently adjusted for inflation.
-- Child care, tuition and research and development tax credits will be renewed.
-- The "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.
The Democratic-led Senate overwhelmingly approved the bill early Tuesday before passing it to the House.
As news about the fiscal cliff's deflection spread across the world, several markets reacted positively Wednesday.
Australia's ASX All Ordinaries index added 1.2 percent. South Korea's KOSPI gained 1.5 percent, and the Hang Seng in Hong Kong advanced 1.9 percent. Tokyo's Nikkei and the Shanghai Composite remain closed for holiday celebrations but will reopen later in the week.
Payroll taxes still set to go up
Despite the last-minute fiscal cliff agreements, Americans are still likely to see their paychecks shrink somewhat because of a separate battle over payroll taxes.
The government temporarily lowered the payroll tax rate in 2011 from 6.2 percent to 4.2 percent to put more money in the pockets of Americans. That adjustment, which has cost about $120 billion each year, expired Monday.
Now, Americans earning $30,000 a year will take home $50 less per month. Those earning $113,700 will lose $189.50 a month.
With the latest battle round over, lawmakers will next set their sights on the other items on their docket of congressional squabbles over money: the debt ceiling and resolving the sequester.
Obama said he hopes leaders in Washington this year will focus on "seeing if we can put a package like this together with a little bit less drama, a little less brinksmanship (and) not scare the heck out of folks quite as much."
He thanked bipartisan House and Senate leaders for finally reaching a resolution Tuesday, but said Congress' work this year is just beginning.
"I hope that everybody now gets at least a day off I guess, or a few days off, so that people can refresh themselves, because we're going to have a lot of work to do in 2013."
He then flew to Hawaii to rejoin his wife and daughters on their winter vacation.
Angry rhetoric flew
In the tense days leading up to the deal, heated words flew between some Democrats and Republicans.