Lawmakers in Washington struck a last-minute deal Tuesday night to keep America from tumbling off the fiscal cliff.
House Republicans reluctantly approved a bill that prevents massive tax hikes from hitting nearly every American, handing President Obama many of the tax increases on the rich that he campaigned on.
"I will sign a law that raises taxes on the wealthiest 2 percent of Americans, while preventing a middle class tax hike that could have sent the economy back into a recession," the president said.
With the fiscal cliff deal in place, what will the economy look like by the end of 2013? Bill Frezza, fellow with the Competitive Enterprise Institute, explains more on CBN Newswatch, Jan. 2.
Still, Republican lawmakers say the measure leaves many issues unaddressed, like Washington's ongoing spending spree.
"There's no spending cuts. We're adding $4 billion a day to the debt. We feel like the Senate bill failed miserably," Rep. Spencer Bachus, R-Ala., said.
Meanwhile, taxes will go up by about 2 percent for a majority of Americans. The bill allowed the temporary Social Security payroll tax reduction to expire.
As a result, a non-partisan Washington research group estimates that 77 percent of households will pay those extra taxes in 2013.
"Social Security tax is now going up to the statutory rate. So everybody is...we assume everybody's payroll is going to go up about another 2 percent on their W2," tax preparer Jim Geswein said.
"For me That's a cable bill; it's going out to eat, you know, once a week. It's real money going out the window," he said.
The bill also does nothing to increase the so-called debt ceiling. In two months, the government will reach its limit on borrowing unless Congress steps in.
Obama said he hopes they can reach a compromise on that deal without coming down to the wire.
"The one thing that hopefully in the new year we'll focus on is seeing if we can put a package like this together with a little less drama, a little less brinksmanship, not scare the heck out of folks quite as much," he said.
The president left Washington late Tuesday night after the fiscal cliff deal to return to his vacation in Hawaii.