The Senate passed the bill to raise the debt limit and cut spending. /*President Barack Obama*/ signed the measure into law shortly after.
Passage of the bipartisan legislation promises more than $2 trillion in budget cuts over the next 10 years, but also keeps the country from defaulting on its loans.
Obama waited for the bill to reach his desk before commenting in the White House Rose Garden.
"This compromise guarantees more than $2 trillion in deficit reduction," Obama said. "It's an important first step to ensuring that as a nation we live within our means. It also allows us to make key investments in things and research that lead to new jobs and assures we're not cutting too abruptly while the economy is still fragile. This is, however, just the first step."
The president says Congress still needs to find a balanced way to reduce the deficit, which includes some adjustments in Medicare.
He wants to extend tax cuts for middle class families and for the wealthy to pay more. He also wants Congress to pass a set of trade deals to help sell American products overseas.
Although the bill passed in Congress, both parties still have problems with what's being laid out on the table.
Republicans don't like the fact that the bill cuts defense and that it gives the government the ability to grow nearly $2.5 trillion more.
Democrats are critical of deep spending cuts, no tax increases, and that the measure opens the door to Medicare cuts.
"This deficit reduction package is grotesquely unfair," said Sen. Bernie Sanders, I-Vt. "It is also bad economic policy."
"I have decided I will not vote for the bill," said Sen. Jeff Sessions, R-Ala. "Although, I really respect the people who have worked on it and the fact that it does take some real progress towards reducing spending, although, far less than we need."
Obama remained behind closed doors during the House vote on Monday. But he did send out a video message to supporters announcing the creation of a "super committee" in Congress that could possibly raise taxes - something the debt deal can't do.
"The ultimate solution must be balanced," Obama said. "Big corporations and the wealthiest Americans shouldn't be exempt from kicking in."
Leadership from both sides would appoint a 12-member committee of legislators to find an extra $1.5 trillion in deficit reductions by late Nov.
Congress would vote on the measure by the end of the year. If it doesn't pass, that would trigger deep cuts to the Pentagon and domestic programs.
Hal Dash, the CEO of Los Angeles-based political consulting company Cerrell Associates, says the committee will have the unenviable task of tackling the unpopular issues, such as tax hikes and cuts in entitlement programs like Medicare and Medicaid.
"This is going to be a globally-focused commission because what they do economically will ripple all over the world," Dash said. "Who knows if they'll be able to get out of their own way. We hope there's a solution, but it will be incredibly partisan, incredibly difficult, with some very, very hard choices."
Some say the committee will likely end up deadlocked.
As an incentive for the committee to write a proposal that Congress passes, there's a mechanism in place that would trigger automatic spending cuts to defense and entitlement programs. But Edward Kleinbard, a professor at USC's Gould School of Law, says Congress will likely find a way around it.
"What we will see is a super committee that argues, that pontificates, that has lots of sound bites, that produces nothing," Keinbard said. Its entire purpose is simply to defer all decision until January 13."
On Tuesday, attempts to reach a deal to get the Federal Aviation Administration back to work fell through.
Four thousand employees are furloughed and 200 construction projects are on hold. If the shut down continues until Congress reconvenes, $1.2 billion in taxes will go uncollected.
On the House floor Monday night, the focus was on the debt deal and on one very special congresswoman who made her first appearance back on Capitol Hill.
/*Rep. Gabrielle Giffords*/ received a standing ovation from colleagues in Washington. Giffords, who was shot in the head just seven months ago at an event in Tucson, made the special trip to cast her vote in favor of raising the debt ceiling.
Those close to Giffords say she still has a long way to go in her recovery, but that she wanted to be there for the vote and that was appreciative of the outpouring of support.
Giffords returned to Houston to continue her physical therapy.
For now, Congress heads into its five week vacation.
