US Vice President Biden and Senate Minority leader McConnell brokered an agreement that was approved by the Senate that seems to avoid the full fiscal cliff. It now is before the House of Representatives.
While the Jan 1 deadline is passed, the more significant one, we had argued was Jan 3, when a new Congress is sworn in. A failure by the 112th Congress to finalize the legislation would mean that process would have to begin anew with the 113th Congress.
After what is likely to be intense though short debate, the House of Representatives can either approve the same exact bill the Senate approved, which be the quickest resolution. It can seek to amend the bill, in which case it must return to the Senate for their approval. The process could be cumbersome and require reconciliation and would risk the Jan 3 deadline. Alternatively, a majority of the House could fail to ratify the Senate bill, in which case, it will be up the next Congress to claw back from the other side of the cliff.