The fiscal cliff legislation doesn't address some of the most important issues that are components of the cliff - the government spending sequester cuts, for example, and the debt ceiling - but the tax cuts were by far the largest issue that needed to be dealt with. As a compromise, tax rates will rise not on income-earners over $250,000, as President Obama pushed for, but only on those above $450,000.
The House passed the legislation 257-167. Republicans voted overwhelmingly against it - only 85 voted in favor - while Democrats carried it across the finish line with 172 "yes" votes. Speaker John Boehner voted in favor of the legislation, as did former Vice Presidential candidate Paul Ryan.
"I came to Congress to make tough decisions - not to run away from them," Ryan's statement said.
Due to the payroll tax expiration, most Americans are going to see taxes take a larger chunk out of their paychecks. More than three-quarters of Americans will see a smaller paycheck throughout all of 2013 due to the failure to deal with the payroll tax cut, but the payroll tax cut never had too many champions on Capitol Hill.
One of the worries with going down to the wire on the fiscal cliff was that markets were going to revolt. With a deal done - even one that allows tax hikes on the highest income-earners - markets have started to rally.
Stocks around the world started 2013 with hefty gains as investors welcomed the vote in the House of Representatives that made sure that the U.S. does not go over the so-called "fiscal cliff." Though longer-term fiscal problems remain and President Barack Obama will likely face more battles with the Republican-dominated House, investors were relieved that the biggest near-term stumbling block to the world economy has been cleared.
There will be a series of policy battles to come in the near future due to the legislation punting on many of the key issues in the fiscal cliff. The spending sequester will have to be dealt with. The debt ceiling will need to be raised. And the U.S. needs a nominal budget, even if it's just a continuing resolution, by the end of March. For now, however, the fiscal cliff has been largely averted.