The Senate voted 81-18 in favor, the house followed with more than 80 Republicans crossing the aisle to help the bill pass by nearly 150 votes.
Senate passage came several hours after Majority Leader Harry Reid and Minority Leader Mitch McConnell announced the bipartisan compromise.
The bill would reopen the government through Jan. 15 and permit the Treasury to borrow normally through Feb. 7 or perhaps a month longer.
Congress faced a deadline of 11:59 p.m. on Thursday. That's when Treasury Secretary Jacob Lew had said the government would reach the current $16.7 trillion debt limit and could no longer borrow to meet its obligations.
President Obama made statements shortly after the Senate's passing of the bill that he would sign it as soon as it hit his desk.
UC Berkeley Professor John Ellwood says folks shouldn't feel too relieved about the deal though,
"Well, we've postponed the crisis, haven't we?  The Republican ship was taking vast amounts of water and they have punted for a postponement, but I don't think they've changed their minds in the house."

Ellwood goes on to say that, unfortunately, we may be stuck in a cycle where the government shuts down every few months - with both parties digging in their heels. Of course, there could always be some sort of compromise:

"Then maybe there's a grand bargain that can be worked out, but I sort of doubt that.  I think it will take a series of elections in which one side or the other wins consistently."

President Obama Reacts:

The associated press contributed to the content of this article.