By MICHAEL FALCONE ( @michaelpfalcone ) and AMY WALTER ( @amyewalter )

NOTABLES:

• SENATE PASSES FISCAL CLIFF DEAL, BUT HOUSE MUST VOTE: ABC's Devin Dwyer, Sunlen Miller, and Jonathan Karl report: Two hours after a midnight deadline for action, the Senate passed legislation early New Year's Day to avert the so-called "fiscal cliff" by an overwhelming 89-8 vote. Senate passage set the stage for a final showdown in the House, where a vote could come as early as today. "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," President Obama said in a statement shortly after the vote. "There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans," he added. http://abcn.ws/S2S5S3

• MORE FROM THE OVAL OFFICE: "This agreement will also grow the economy and shrink our deficits in a balanced way - by investing in our middle class, and by asking the wealthy to pay a little more," President Obama said in a 2:30 a.m. ET statement. "What's more, today's agreement builds on previous efforts to reduce our deficits. Last year, I worked with Democrats and Republicans to cut spending by more than $1 trillion. Tonight's agreement does even more by asking millionaires and billionaires to begin to pay their fair share for the first time in twenty years. As promised, that increase will be immediate, and it will be permanent."

• WHAT'S IN THE DEAL? ABC's Jonathan Karl reports on the details: Bush era tax cuts extended, permanently, for individuals making under $400,000, households making under $450,000; automatic "sequester" cuts are postponed for two months (paid for half by cuts elsewhere and half by new revenue); estate tax rises to 40 percent for estates over $5 million; long-term unemployment benefits extended for 1 year; capital gains and dividends to be taxes at 20 percent. http://abcn.ws/Vtt9lD

• HOUSE WILL REVIEW IT: ABC's Jonathan Karl, Devin Dwyer, Sunlen Miller, and John Parkinson report: "Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members - and the American people - have been able to review the legislation," said House Speaker John Boehner, Majority Leader Eric Cantor, Majority Whip Kevin McCarthy, and Republican Conference Chair Cathy McMorris Rodgers in a statement. The failure of a deal to pass Congress by Jan. 1 technically triggers an income tax hike on all Americans and automatic spending cuts, though lawmakers could still prevent a tax hike by making retroactive any legislation that passes in the weeks ahead, experts said. http://abcn.ws/12Vly2j

THE NOTE:

If you think the compromise reached between both parties and passed by the Senate in the wee hours of New Year's Day puts an end to the months of haggling between Democrats and Republicans over the fiscal cliff, think again.

It's really just the opening act.

First, of course, the bill heads to the House of Representatives where it will be up for a vote as early as today. As ABC's John Parkinson notes, "The large margin of passage in the Senate is definitely good news for its prospects in the House. The same group of folks (think Tea Party and hard-line deficit hawks) who opposed the Continuing Resolutions and debt limit agreement in Aug. 2011 in the Budget Control Act, are likely to oppose it."

A House Republican conference meeting has been scheduled for this afternoon to consider the Senate-approved deal. But the House vote is just a minor hurdle compared to what's down the road.

As ABC's Chief White House Correspondent Jonathan Karl points out, even if this deal is passed by the House and signed by President Obama, another cliff lies ahead in two months when the debt ceiling is hit and sequester cuts kick in.

More specifically, according to The New York Times' Jonathan Weisman: "Treasury Secretary Timothy F. Geithner formally notified Congress that the government reached its statutory borrowing limit on New Year's Eve. Through some creative accounting tricks, the Treasury Department can put off action for perhaps two months, but Congress must act to keep the government from defaulting just when the 'pause' on pending cuts is up. Then in late March, a law financing the government expires." http://nyti.ms/WhGNoo

And Politico's Jake Sherman, Carrie Budoff Brown and Kate Nocera note, "as big a deal as it was, it did little to address the nation's long-term deficit problem - there's nothing in it to pare back entitlement spending." http://politi.co/VtoeRC

So, what looks like a relatively soft landing off of this fiscal cliff has simply landed lawmakers at the edge of a whole mountain range of even steeper cliffs to come.

Check ABC News throughout the day for live updates from our reporters at the White House and on Capitol Hill: http://abcn.ws/VtxCEX

NOTED!

ABC's AMY WALTER: This was not exactly a profile-in-courage moment for Congress. This deal simply kicks the proverbial can down the road for a few more months when a new Congress will have to deal with debt ceiling and serious budget cuts. And it's appropriate that the votes in the Senate and House are taking place on a day dedicated to good intentions. But, like most New Year's resolutions, it's likely to fall flat by the spring when Congress is supposed to follow through on doing the serious work needed to really wrestle down the nation's deficit.

ABC's RICK KLEIN: A sad tale needs an unlikely hero. Vice President Joe Biden fits the bill - the man with the resume and the personality to salvage something out of the mess of New Year's negotiations. It was Biden whom Senate Minority Leader Mitch McConnell reached out to when he needed a dance partner, and it was Biden whom Senate Majority Leader Harry Reid called on to sell the deal to his own colleagues. It's old-fashioned deal-making that could be relevant again in this era of governance by cliff-building. The big danger for Biden is crossing aisles his party base (hello, 2016) wants avoided. But for now, governance trumps such concerns. Biden got the splintered Senate to patch itself together for at least one moment.

THE BUZZ:

with ABC's Chris Good ( @c_good)

MORE DETAILS ON THE DEAL. The Associated Press has more: Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000. … Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. … Extends for five years Obama-sought expansions of the child tax credit, the earned income tax credit, and an up-to-$2,500 tax credit for college tuition. Also extends for one year accelerated 'bonus' depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity. … Allows a 2-percentage-point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent. … Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rule changes on converting traditional individual retirement accounts into Roth IRAs. http://abcn.ws/VgC9rZ

DEAL WOULD LIKELY SLOW THE ECONOMY. Bloomberg's Rich Miller & Shobhana Chandra report: "The budget deal passed by the Senate probably would crimp the U.S. economic recovery without stopping it. The elimination of a 2 percent payroll tax cut, coupled with higher income taxes on the wealthy, will help reduce growth in the first quarter to 1 percent, from 3.1 percent in 2012's third quarter, the latest data available, according to economists at JPMorgan Chase & Co. (JPM) and Bank of America Corp. The expansion will strengthen later in the year as the housing market continues to rebound, they forecast. 'It's going to definitely present a headwind for the economy,' Michael Feroli, chief U.S. economist for JPMorgan Chase in New York, said of the fiscal pact that the Senate approved early today, sending it to the House of Representatives. "We're looking for a downdraft in growth in the first half of the year, with the economy coming back in the second." The first half slowdown will mean that the U.S. will make limited progress in reducing unemployment in 2013, according to projections by Ethan Harris, co-head of global economic research for Bank of America in New York. He sees the jobless rate falling to 7.5 percent in the fourth quarter of 2013 from 7.7 percent in November 2012." http://bloom.bg/YKlCwZ

CLINTON'S BLOOD CLOT FOUND BETWEEN BRAIN AND SKULL. ABC's Dana Hughes reports: The blood clot that put Secretary of State Hillary Clinton in the hospital was found in her head between her brain and skull behind the right ear, her doctors said today. "It did not result in a stroke, or neurological damage," her doctors, Drs. Lisa Bardack and Gigi El-Bayoumi, said in a joint statement. "To help dissolve this clot, her medical team began treating the secretary with blood thinners." The doctors said Clinton will be released "once the medication dose has been established." Clinton, 65, was admitted to New York Presbyterian hospital on Sunday for treatment of a blood clot stemming from a concussion she sustained a few weeks ago, a Clinton aide said. … "In all other aspects of her recovery, the secretary is making excellent progress and we are confident she will make a full recovery. She is in good spirits, engaging with her doctors, her family, and her staff," the statement said. Clinton was supposed to be back at work at the State Department this week, but now the date of her return in unknown. http://abcn.ws/VgCWJe

… COULD HAVE BEEN LIFE THREATENING. ABC's Susan Donaldson James reports: Hillary Clinton's latest health update - cerebral venous thrombosis - is a rare and potentially "life-threatening" condition, according to medical experts, but one from which the globe-trotting secretary of state is likely to recover from. … "She is lucky being Hillary Clinton and had a follow-up MRI - lucky that her team thought to do it," said Dr. Brian D. Greenwald, medical director at JFK Johnson Rehabilitation Center for Head Injuries. "It could have potentially serious complications." The backup of blood flow could have caused a stroke or hemorrhage, according to Greenwald. "Imagine this vein, where all the cerebral spinal fluid inside the head and spine no longer flows through this area," he said. "You get a big back up and that itself could cause a stroke. In the long-term … the venous system can't get the blood out of the brain. It's like a Lincoln Tunnel back http://abcn.ws/YKbjce

WELL WISHES FROM LAWMAKERS. ABC's Sunlen Miller reports: Members of Congress wished Clinton a speedy recovery today, while pressing their call for her to testify before Congress about the U.S. consulate attack in Benghazi. "We just want to say how much Secretary Clinton is in our prayers this morning and hope she recovers rapidly from this health problem," Sen. Joe Lieberman, I-Conn., said at a press conference today. Lieberman is chairman of the Senate Homeland Security Committee. "Secretary Clinton has made clear that she will testify. And I think that's a good idea," said Lieberman. House Foreign Affairs Chairman Rep. Illeana Ros-Lehtinen, R.-Fla., tweeted get well wishes to Clinton Sunday night, but also mentioned Benghazi. "Wishing Secretary Clinton a full + speedy recovery!," Ros-Lehtinen wrote. "She's looking forward 2 testify on #Benghazi and is bummed she can't travel now like b4." http://abcn.ws/VgCWJe

MILK CLIFF AVERTED? America will avoid the dreaded "milk cliff" if the House passes the Senate-approved fiscal deal, reports the AP's Mary Clare Jalonick: "A potential doubling of milk prices will be averted as part of the compromise that White House and congressional bargainers reached on wide-ranging legislation to avert the 'fiscal cliff,' a leading senator said late Monday. Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., told reporters that negotiators had agreed to extend portions of the expired 2008 farm bill through September. She said that includes language keeping milk prices from rising, but excludes other provisions like energy and disaster aid for farmers." http://abcn.ws/Uiwalj

SUPREME COURT: CLIFF? DON'T LOOK AT US. ABC's Arianne de Vogue reports: Acknowledging the "much publicized fiscal cliff" and the country's "truly extravagant and burgeoning national debt," Chief Justice John Roberts dedicated the majority of his annual year-end report to a summary of the efforts by the Judiciary Branch of government to contain costs. In the report, which is traditionally released on the last day of the year, Roberts writes, "No one seriously doubts that the country's fiscal ledger has gone awry," and says the public will look to its "elected officials to craft a solution." "We in the Judiciary stand outside the political arena, but we continue to do our part to address the financial challenges in our sphere." In the report, Roberts writes, "The Judicial Branch continues to consume a miniscule portion of the federal budget." http://abcn.ws/VttFQn

TWEETS LIKEN CLIFF TO Y2K, MAYAN CALENDAR. Some people think the "fiscal cliff" is going to be a lot like those disaster deadlines: a bunch of hype, and not much catastrophe. At least one U.S. senator, Iowa Democrat Tom Harkin, is on record comparing the fiscal cliff to Y2K. So are a whole lot of people on Twitter, desensitized by repeated warnings of economic cataclysm. A sampling of fiscal cliff/Y2K/Mayan calendar tweets: @RyanLizza Going over cliff may be most anticlimactic event since Mayan end of the world day … @JHoffman6 Is the Fiscal Cliff Y2K compliant? … @rubinbooty Bracing for the fiscal cliff the same way I prepared for Y2K: lots of candles, batteries, cans of soup, backing everything up to floppy disk … @rationalists Fiscal Cliff is the Y2K of 2012 Mayan prophecies. http://abcn.ws/Wcs1yV

OBAMA'S AFTERNOON PRESSER DIDN'T SIT WELL. President Obama appeared for an afternoon press conference to announce that Washington could deal with the "fiscal cliff" piecemeal. That didn't sit too well with congressional Republicans, including Sen. John McCain, who blasted Obama on the Senate floor, saying, "So what did the president of the United States just do? Well, he kind of made fun, he made a couple jokes, laughed about how people are gonna be here for New Year's, sent a message of confrontation to the Republicans … I guess I have to wonder, and I think the American people have to wonder, whether the president really wants this issue resolved or is it to his short-term political benefit for us to go over the cliff?" WATCH: http://abcn.ws/Xe5oR5

BIDEN AT THE CENTER OF FISCAL-CLIFF TALKS. After talks broke down between Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid, McConnell over the weekend turned to Vice President Joe Biden to jump-start negotiations, talking instead with the VP. After Senate Republicans and the White House struck a deal, ABC's Sunlen Miller reported around 11 p.m. that Biden pitched it to Senate Democrats: The closed-door meeting between Vice President Biden and Senate Democrats has concluded. It lasted more than an hour and a half. Reaction ranged from supportive to frustrated among lawmakers leaving the meeting. Senate Majority Leader Harry Reid said he would call a vote tonight. Sen. Tom Harkin, a leading liberal who earlier Monday said he couldn't support the outlines of the deal, had no comment for reporters, but promised he would let his opinion be known on the Senate floor. But Sen. Chuck Schumer, the New York Democrat and number three senator in his party, said there is "strong" support for the plan by Senate Democrats. http://abcn.ws/Vtt9lD

WHAT'S MISSING FROM THE CLIFF DEAL? The Atlantic's Matthew O'Brien argues it's the expiration of a two-percent reduction in Social Security payroll taxes: "The end of the payroll tax cut, and the lack of any substitute, is the biggest thing missing from the fiscal cliff deal. Without it, the Tax Policy Center figures middle-class households will see their after-tax incomes fall around 1.5 percent, which the CBO estimates will cost us around a half million jobs. Why has the payroll tax cut become such a political orphan? Well, Republicans aren't crazy about more stimulus, and Democrats aren't crazy about a tax cut that makes Social Security more dependent on general revenues, and thus less politically solvent. But there is a way around this. It's an idea Democrats used in 2009 and floated again a few months ago, before dropping. That's bringing back the Making Work Pay tax credit-and doubling it." http://bit.ly/U420Yb

GRAND BARGAINS AND QUICK FIXES. The New York Times' Jennifer Steinhauser writes about the new paradigm of compromise: "The confusing struggle to head off a national fiscal crisis has made one thing crystal clear: The era of the Big Deal is over. Despite repeated, intense and personal efforts by President Obama and Speaker John A. Boehner as well as bipartisan coalitions, gangs of senators, supercommittees, special commissions and wonky outsiders, the grand bargain remains the elusive holy grail of fiscal policy and seems destined to stay that way for now. 'We don't seem to be able to do grand bargains very well,' said Senator Susan Collins, Republican of Maine, who has long been a force for compromise. … As Mr. Obama all but acknowledged Monday, big bipartisan legislative dreams seem all but certain to be miniaturized as incremental policy visions. 'My preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it,' he said. "Maybe we can do it in stages. We're going to solve this problem instead in several steps.' … In March, Congress will spar again over a short-term spending agreement to keep the government open, the same sort that led to a near shutdown almost two years ago." http://nyti.ms/TEbkhO

AFL-CIO: DON'T DO THE DEAL. With talks moving forward Monday evening, The Huffington Post's Sam Stein reported: "Richard Trumka, president of the AFL-CIO, tweeted his opposition to a proposal that would raise tax rates only on incomes above $400,000 for individuals and $450,000 for couples, while inviting future debt-reduction standoffs just months down the road. 'Its not a good #fiscalcliff deal if it gives more tax cuts to 2 percent and sets the stage for more hostage taking,' Trumka wrote." http://huff.to/10IGj1A

ARMEY DEFENDS HIS $8 MILLION DEAL TO LEAVE FREEDOMWORKS. ABC's Shushannah Walshe reported: "Former House majority leader Dick Armey says he took an $8 million consulting deal in return for leaving the conservative organization FreedomWorks because the group was 'dishonest' and because he 'couldn't leave with empty pockets.' The arrangement, he says, will allow him to 'never have to work again forever.' In an interview with ABC News as he was winding down his Wii Fit workout, Armey spoke frankly and at length about his dispute with FreedomWorks, his eyebrow raising consulting contract, and the strategy of the Republican Party." http://abcn.ws/TNAH4m

IN THE NOTE'S INBOX:

-MOVEON DOESN'T LIKE THE DEAL. Statement from MoveOn.org Executive Director Justin Ruben: "We just finished an election in which the American people made clear that they want the wealthiest 2% to finally pay their fair share of taxes, but this agreement fails to meet that test. Voters gave President Obama a mandate to end the Bush tax cuts for those making more than $250,000. He has not delivered. We are also deeply concerned about the short-term nature of the sequester extension, which means that in just two months, the country will yet again face a situation in which the GOP tries to hold our economy hostage as it seeks policies that benefit the rich. It is important to note that there are no Social Security, Medicare, or Medicaid cuts in this agreement-and that's a good thing."

-PROGRESSIVES LOBBIED DEMOCRATIC HILL STAFFERS. At 7 p.m., as a deal approached, the Progressive Change Campaign Committee emailed Democratic staffers on Capitol Hill, warning them not to agree to the $400,000 mark for income-tax increases: "There has always been room for negotiation, but throughout this debate progressives have had 2 bright-line positions: Tax rates on those making $250,000 must go up to at least the Clinton rates and there must be no cuts to Medicare, Medicaid, and Social Security benefits. The president ran on and won on $250,000 twice. Voters across the country overwhelmingly agree with the $250,000 threshold (see http://2014polling.com). And in real human costs, the billions lost by raising the threshold to $400,000 will come out of the pockets of grandparents and working families across the nation. Meanwhile, individuals making over $30,000 per month would get a tax break. Democrats hold the cards, and our leverage increases in less than 10 hours if we hold strong."

WHO'S TWEETING?

@nytjim: Voted no on tax deal: Rubio (R-FL), Paul (R-KY), Lee (R-UT), Grassley (R-IA), Carper (D-DE), Bennet (D-CO), Harkin (D-IA), Shelby (R-AL)

@j_strong: Rubio's no vote puts pressure on Paul Ryan, bc this is def coming up in the GOP primary

@jasoninthehouse: Without substantial, real first year cuts in spending I can't vote for the bill passed by the Senate late last night.

@HowardKurtz: A journalistic all-nighter: If no one is awake to see your 2 am live shot, does it exist? The media's cliff marathon http://bit.ly/VX9E0B

?@matthewjdowd: Happy new year! If asked what's the best year in your life, let's all say 2013. With hope and courage and love I walk forward into it.

@ArletteSaenz: Happy Birthday @TweetRobJohnson!!!