The U.S. Senate passed the plan, which imposes sweeping new spending cuts over the next decade, shortly after noon ET. The bill was approved in a 74-26 vote; 60 votes were required for passage.
POLL: Debt Ceiling Deal
Are you satisfied with the debt ceiling deal?
Only as a short-term fix
(Results not scientific)
This poll is closed to voting.
- Emotional Applause As Giffords Returns To Cast Debt Vote
See more topics »
Obama praised the deal moments after the Senate passed it, calling the measure "an important first step for ensuring that as a nation we don't live beyond our means."
But the American economy "didn't need Washington to come along with a manufactured crisis," the president noted. "It's pretty likely that the uncertainty surrounding the raising of the debt ceiling -- for both businesses and consumers -- has been unsettling, and just one more impediment to the full recovery that we need. And it was something that we could have avoided entirely."
"Voters may have chosen divided government, but they sure didn't vote for dysfunctional government," the president said.
If the debt ceiling had not been increased before the end of Tuesday, Americans could have seen rapidly rising interest rates, a falling dollar and shakier financial markets, among other problems.
Regardless, the federal government could still face a credit rating downgrade.
The agreement -- reached Sunday by Obama and congressional leaders from both parties -- calls for up to $2.4 trillion in savings over the next decade, raises the debt ceiling through the end of 2012 and establishes a special congressional committee to recommend long-term fiscal reforms.
Emotions ran high during the final debates on Capitol Hill. Numerous Republicans remain worried about cuts in defense spending and the lack of a required balanced budget amendment to the Constitution. Progressive Democrats are livid over the extent of the deal's domestic spending cuts, as well as the absence of any immediate tax hikes on high-income Americans.
"On this matter, my conscience is conflicted," Sen. Dick Durbin, D-Illinois, said Tuesday morning. "If we should default on our debt, terrible things will ensue." But if "we continue to move toward more and more spending cuts, we will literally disadvantage the poor and working families of America to the advantage of those who are well off."
But Sen. Mark Kirk, R-Illinois, praised the agreement, calling it "a down payment on further ways to bring common sense ... to the spending of our government,"
"If we fail, we deliver a free people into the hands of financial bondage," he warned.
Sen. Joe Lieberman, I-Connecticut, called the deal a first step in "a long, hard march back to fiscal responsibility in our country."
"Nobody seems perfectly satisfied with it, but that's inevitable," Lieberman said. "For me, the positive outweighs the negative."
GOP leaders sold the deal to skeptical rank-and-file Republicans in recent days by arguing that it will finally begin the process of reforming spending and taming the growing debt, a key goal of conservatives who fueled the GOP takeover of the House in last year's midterm elections.
Top Democrats have focused on the fact that the bill preserves benefits from popular entitlement programs such as Medicare and takes the politically problematic debt ceiling issue off the table until 2013.
In the end, the majority of both Democrats and Republicans supported the legislation in the Senate.
In the House, Boehner was able to round up the support of most of his GOP caucus, while the chamber's two top Democrats -- Minority Leader Nancy Pelosi of California and Minority Whip Steny Hoyer of Maryland -- voted for the plan along with more than 90 of their caucus members.