WASHINGTON - With agreement to lift the nation's debt ceiling secured, Congress now turns to the next budget showdown: the deep automatic spending cuts that will start to hit the economy next month, which lawmakers appear unwilling -- or unable -- to stop.
The Senate sent legislation to temporarily suspend the $16.4 trillion debt limit thrugh May 18 to the White House on Thursday for President Obama's signature. The vote was 64-34, with mostly Republicans and one Democrat opposed.
Now, Congress must decide whether to stop the $1.2 trillion in spending cuts that are scheduled to begin March 1. Those reductions were once considered so severe that they would force lawmakers to the table to negotiate a more balanced deficit-reduction compromise.
With a month to go, both sides admit there is little hope they can reach agreement. The cuts, called a sequester in Washington parlance, would slice equally across defense and domestic programs, drawing government spending out of the already sluggish economy.
"I think it's more likely to happen," said Sen. Lindsey Graham, R-S.C., who is leading a campaign to prevent Pentagon reductions. "In a body that's known for doing pretty dumb things, this to me wins the prize."
The prospect of allowing the cuts to take place has divided the Republican Party, as many conservatives have come to the conclusion that severe cuts are better than none, especially as they continue to smart over the tax increases Obama achieved as part of the year-end fiscal cliff deal. Ever since House Speaker John Boehner engineered passage of the debt ceiling measure last week in the lower chamber, Republicans have complained that the party has now lost two opportunities to extract budget cuts.
"The sequester's going to go into effect on March 1st unless there are cuts and reforms that get us on a plan to balance a budget over the next 10 years," Boehner, R-Ohio, said last week after the House approved the debt ceiling legislation. "It's as simple as that."
Boehner devised the bill as a way to punt this most risky of budget issues and move to others. He wanted to avoid the spectacle of a showdown with the White House that could lead to a default as his conservative troops pressed for spending reductions in exchange for raising the debt limit. To attract conservative support, the speaker tacked on a provision to withhold lawmakers' pay if Congress fails to approve a budget for the next fiscal year.
Obama is expected to swiftly sign the measure.
Lawmakers and their aides have acknowledged that while many ideas are being floated to prevent the cuts, the critical differences that have blocked past deals remain: Democrats want tax increases on the wealthy and corporations; Republicans want only cuts, particularly those that shift the burden from defense and to domestic programs.
Some expect the sequestration would go into effect only temporarily, perhaps until March 27, when lawmakers will need to reach agreement to continue funding the government or risk a shutdown. Senate Majority Leader Harry Reid, D-Nev., said he envisions a solution that would swap out some spending cuts for modest revenue increases. But that would probably not reach the $1.2 trillion threshold needed to offset the scheduled cuts.