The final result, as passed by the Senate, watered down budget cuts from $600 billion to a mere $12 billion.
Moreover, the extension of the tax cuts will add almost $4 trillion to the deficit over 10 years according to CBO analysis of the American Taxpayer Relief Act.
Nonetheless, that was not enough for liberal democrats who thought they did not get enough out of the deal.
The "Fiscal cliff" moves to House, where a slim hope remains that Republicans will punt this bill a mile high.
In a rare late-night show of unity, the Senate voted 89 to 8 to raise some taxes on the wealthy while keeping income taxes low on more moderate earners.Only 5 Republicans Voted Against
Republicans, unhappy that the bill contained over $600 billion in tax increases but only around $12 billion in spending cuts, said they may change it more to their liking and send it back to the Senate. Party leaders planned to take the temperature of rank-and-file lawmakers over the afternoon before deciding on a course of action.
"My recommendation would be not to take a package put together by a bunch of sleep-deprived octogenarians on New Year's Eve," said Representative Steve LaTourette, a moderate Republican from Ohio who is a close ally of House Speaker John Boehner.
"My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Representative Steve Cohen, a Democrat from Tennessee, said on the House floor.
The White House has floated $600 billion worth of spending cuts in earlier negotiations, and Obama said he would be willing to tackle deficit reduction over the coming months.
"There's more work to do to reduce our deficits, and I'm willing to do it," he said in a statement urging the House to pass the current bill.
Republican Representative Tom Cole said his House colleagues should pass the Senate bill rather than try to change it.
"We ought to take this deal right now, and we'll live to fight another day," Cole said on MSNBC.
The Tax Foundation has additional Details of the Fiscal Cliff Tax Deal
At 2AM this morning, the Senate passed H.R. 8, the American Taxpayer Relief Act of 2012, by a vote of 89-8. Voting no were Bennet (D-CO), Carper (D-DE), Grassley (R-IA), Harkin (D-IA), Lee (R-UT), Paul (R-KY), Rubio (R-FL), Shelby (R-AL). Not voting were DeMint (R-SC), Kirk (R-IL), and Lautenberg (D-NJ). TaxProfBlog has the text of Senate-passed bill (157 pages). The Joint Committee on Taxation (JCT) has also produced a revenue estimate, as has the Congressional Budget Office (CBO).White-Flag Surrender
Somehow, right before the election, budget cuts of 10-1 over tax hikes were not acceptable to Republicans. Now, they have settled for a package that essentially makes no budget cuts at all.
This is one of the biggest white-flag political surrenders in history.
Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade
President Obama made the biggest understatement ever regarding the budget deficit: "There's more work to do to reduce our deficits".
More work? Pardon me for asking, when was "any" work done to reduce the deficit? Ill-fated attempts to reduce the budget deficit have only gone in reverse.
Finally, it's important to note that the bill that passed the Senate is technically a tax cut. ZeroHedge accurately sums up the situation as follows "Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade
Mike "Mish" Shedlock