US President Barack Obama has said the bill to raise the US debt ceiling and cut spending was a first step toward ensuring the US lives within its means.
However, Mr Obama said more was needed to rebuild the world's largest economy.
Speaking at the White House, Mr Obama made clear he expects tax reform to emerge from deliberations by a new committee of Democrats and Republicans to be established by the legislation.
He said that a 'balanced approach' in which the wealthier pay more taxes is needed for more deficit reduction.
Mr Obama said uncertainty from the bitter debt debate had been an impediment to business but the economic recovery also suffered from unforeseen problems, such as the Japan earthquake and tsunami.
He urged Congress to pass stalled trade bills and said he wants tax cuts for the middle class and unemployment benefits extended.
'Both parties share power in Washington. And both parties need to take responsibility for improving this economy,' Mr Obama said shortly after the Senate passed the debt bill and sent it to him for signing into law.
'I'll be discussing additional ideas in the weeks ahead to help companies hire, invest and expand.'
Mr Obama criticised US political leaders for taking so long to resolve the impasse over the debt ceiling, bringing the country close to an unprecedented default.
'We have seen in the past few days that Washington has the ability to focus when there is a timer ticking down and when there is a looming disaster,' he said.
'It shouldn't take the risk of default, the risk of economic catastrophe, to get folks in this town to work together and do their jobs.'
The US House of Representatives passed the deal by 269 votes to 161, while the Senate voted 74 to 26 to pass it.
Mr Obama has been castigated by some on the left of his own party. They say he caved in to the demands of a right-wing fringe.
However, the White House believes it was the best deal possible.
An unexpected voter in the house was Gabrielle Giffords. The congresswoman from Arizona was shot in the head earlier this year in Tucson and has staged a remarkable recovery since then.
IMF chief Christine Lagarde applauded the plan, but called for US finances to be placed on ‘a sustainable path.’
'We welcome the agreement to raise the US government's borrowing limit and cut the budget deficit. By reducing a major uncertainty in the markets and bolstering US fiscal credibility, this agreement is good for both the US and the global economy,’ Ms Lagarde said in a statement.
Meanwhile, the Fitch ratings agency has said the deal would allow the US to keep its AAA rating.
But Fitch said it would continue to review the country's long-term deficit profile to see if it merited being listed along with more healthy economies in the exclusive AAA club of borrowers.
Rating agency Moody's also upheld its AAA rating, but added a 'negative outlook' on the grade, saying a historic downgrade could still come if fiscal discipline weakens or economic growth deteriorates significantly.
