Business, Economics and Jobs

Fiscal cliff deal approved by Congress, President Barack Obama returns to Hawaiian vacation


U.S. President Barack Obama prepares to board Marine One and depart from the White House in the early morning hours of January 2, 2013 in Washington D.C..


Aude Guerrucci

President Barack Obama flew back to join his family at their holiday home in Hawaii on Wednesday after Congress approved legislation to avert large income tax increases on most Americans.

Obama hailed the result of the vote, approving legislation that raises taxes on the wealthiest Americans while avoiding the "fiscal cliff" of across-the-board tax increases and spending cuts, Reuters reported.

He had cut his vacation short on Wednesday to oversee negotiation of a deal before a year-end deadline.

More from GlobalPost: Obama cuts vacation short to resume fiscal cliff talks 

The Senate passed the deal two hours after midnight on Jan.1, missing the formal deadline to avoid spending cuts and tax rises.

As New Year's day was a federal holiday, and markets were closed, the Senate deal needed the full approval of Congress before Wednesday to stave off the major financial effects of the plunge.

More from GlobalPost: Fiscal Cliff: Senate passes deal two hours after midnight

The bill, which will also prevent big cuts in defense spending, was approved 257 to 167, according to The New York Times.

Eighty-five Republicans joined 172 Democrats in approving the first income tax rise in two decades.

Obama — while lamenting that the deal did not address the broader issues involving spending and debt — said "we are continuing to chip away at this problem step by step," according to a White House transcript of his remarks.

He called on Republicans to agree on further tax revenues and spending cuts, adding:

"The one thing that I think hopefully the new year will focus on is seeing if we can put a package like this together with a little bit less drama, a little less brinksmanship [stet] and not scare the heck out of folks quite as much."

He also warned Republicans not to use an upcoming vote on raising the debt ceiling to push for spending concessions.

"While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills they’ve already racked up through the laws they have passed. Let me repeat we can’t not pay bills that we’ve already incurred."

As he left the White House briefing room to board a plane on the South Lawn, he told reporters, "Happy New Year, everybody." 

He boarded Air Force One about 30 minutes after his remarks at the White House, USA Today reported, and was scheduled to arrive in Honolulu early Wednesday morning to rejoin wife Michelle and the couple's two daughters.

Despite the deal, however, taxes will go up for the average American household. NBC News noted that the biggest impact would be the expiration of the payroll tax holiday, amounting to two percent of wages.

Without the fiscal cliff deal, taxes would have jumped by an average of $3,500 per household. With the deal, they are likely to rise by about $25 a week.