Obama put his signature on both hard-fought bills while vacationing in Hawaii, where he has been regrouping with his family since Saturday. The bill signing marks one of Obama's last official acts in a year beset by a partial government shutdown, a near-default by the Treasury, a calamitous health care rollout and near-perpetual congressional gridlock.
Although the budget deal falls short of the grand bargain that Obama and congressional Republicans once aspired to, it ends the cycle of fiscal brinkmanship - for now - by preventing another shutdown for nearly two more years.
But the rare moment of comity may be short-lived. Hanging over the start of the year is a renewed fight over raising the nation's borrowing limit, which the Treasury says must be resolved by late February or early March to avert an unprecedented U.S. default. Both sides are positioning behind customary hard-line positions, with Republicans insisting they want concessions before raising the debt limit and Obama insisting he won't negotiate.
The last vestiges of 2013's legislative wrangling behind him, Obama's attention turns now to major challenges and potential bright spots in the year ahead. In late January, Obama will give his fifth State of the Union address, setting his agenda for the final stretch before the 2014 midterm elections, in which all of the House and one-third of the Senate are on the ballot.
The elections could drown out much of Obama's effort to focus attention on his own, key agenda items.
Those include his signature health care law. The critical enrollment period for new insurance exchanges closes on March 31. Also at mid-year, Obama will be seeking to secure a comprehensive nuclear deal with Iran before a six-month deal struck in November runs out.
"Hopefully the president has finally learned that if he wants a productive second term we need to focus on finding areas of common ground," said Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio.
Wary of letting expectations get too high, Obama's advisers have been careful not to read too much into Congress' success in trumping pessimistic expectations and pulling off a modest, end-of-year budget deal.
In an email on Thursday, senior Obama adviser Dan Pfeiffer called for a renewed focus in the new year on job creation, an unemployment insurance extension and raising the minimum wage.
"While it's too early to declare a new era of bipartisanship, what we've seen recently is that Washington is capable of getting things done when it wants to," Pfeiffer said. "There's an opportunity next year for this town to do its job and make real progress."
The product of intensive talks before lawmakers left Washington for Christmas, the budget deal alleviates the harshest effects of automatic budget cuts on the Pentagon and domestic agencies. It reduces those cuts, known as the sequester, by about one-third, restoring approximately $63 billion over two years.
A projected $85 billion in savings are located elsewhere in the deal, including increases in an airport security tax and a fee corporations pay to have pensions guaranteed by the government. Also included: a contentious provision to pare down annual cost of living increases in benefits for military retirees under age 62. Those cuts will save the government about $6.3 billion over a decade.
With lawmakers eager to leave town for the holidays and Republicans hoping to keep the focus on problems with Obama's health care law, the deal passed with bipartisan support in both the Democratic-controlled Senate and the Republican-controlled House - despite opposition from tea party groups that lined up to oppose it, arguing the deal would raise spending.
The comprehensive defense bill Obama signed will give military personnel a 1 percent pay raise. It also covers combat pay, ships, aircraft and bases. Lawmakers also gave Obama a rare victory in his fight to close Guantanamo Bay, by lifting the most rigid restrictions on transferring detainees overseas as part of the defense bill.
In a statement Thursday, Obama said Congress had taken a positive step by lifting those restrictions, but protested other constraints Congress left in place, including a ban on transferring detainees to the U.S. for imprisonment, trial or medical emergencies. He said some of the remaining restrictions, in some circumstances, "would violate constitutional separation of powers principles."
"I oppose these provisions, as I have in years past, and will continue to work with the Congress to remove these restrictions," Obama said.
The signing of the defense bill capped a year-long campaign led by the women of the Senate to address the scourge of rape and sexual assault in the military, which the Pentagon estimates may have affected 26,000 members of the military last year.
Commanders will no longer be permitted to overturn jury convictions for sexual assault. The law also requires a civilian review when commanders decline to prosecute, requires dishonorable discharge or dismissal for those convicted, eliminate the statute of limitations for courts-martial in rape and sexual assault cases and criminalizes retaliation against victims who report an assault.
The bill provides $552.1 billion for the regular military budget and $80.7 billion for the war in Afghanistan and other overseas operations, reflecting deficit-driven efforts to trim spending and the drawdown in Afghanistan after more than a decade of fighting there.
Obama signed the two bills and several others in private, without reporters present, after an early-morning workout a nearby Marine Corps base. After signing the bills, Obama set off for a hike with his wife and daughters along a popular trail in Oahu leading to a 150-foot waterfall.
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