After weeks of bickering, members of Congress passed a bill late Tuesday that would avert the worst effects of the so-called fiscal cliff.
The deal, which the Senate overwhelmingly passed early New Year's Day and the House approved late Tuesday night, protects millions of families from tax increases that were scheduled to take effect on January 1 and postpones automatic, across-the-board spending cuts that could devastate federal funds for student aid and university research.
The bill, which President Obama vowed to sign promptly, also extends tax benefits for middle-income families, including the American Opportunity Tax Credit, which allows students and their parents to claim up to $2,500 a year for college expenses.
A popular tax break for research and development, which the Senate Finance Committee voted to extend in August, was also likely to be wrapped into the deal, according to the National Journal, a Washington publication, but details on that proposal were not available late Tuesday.
Wealthier Americans, meanwhile, will see their tax rates rise to Clinton-administration-era levels.
The Senate approved the bill, 89 to 6, and the House did so, 257 to 167, with nearly all the no votes coming from Republicans.
If members of Congress had failed to reach agreement, tax rates would have risen for everyone, not just wealthier Americans. At the same time, spending on both domestic programs and defense would have been slashed, through a process known as "sequestration."
Under sequestration, most aspects of federal spending relating to higher education would face reductions of either 8.2 percent (for discretionary programs) or 7.6 percent (for mandatory programs), including appropriations to the National Institutes of Health and the National Science Foundation, according to a September report from the Office of Management and Budget.
In a brief statement shortly after the House voted, Mr. Obama looked ahead to efforts to deal with those sweeping reductions in federal spending. "We can't simply cut our way to prosperity," he said. "And we can't keep cutting things like basic research and new technology and still expect to succeed in a 21st-century economy."