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Senate Minority Leader Mitch McConnell was besieged by reporters at the Capitol on Monday. The GOP leader had been in daylong talks with Vice President Joe Biden, and the two eventually reached a tentative agreement on taxes as the deadline to avoid the fiscal cliff approached.

T.J. Kirkpatrick, New York Times

Grand Bargain is Holy Grail of Washington budgeting

  • Article by: JENNIFER STEINHAUER
  • New York Times
  • January 1, 2013 - 7:49 AM

WASHINGTON - 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 House Speaker John 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 Sen. Susan Collins, R-Maine, who has long been a force for compromise.

While some groups have produced the framework for smaller deals and even gained some bipartisan support -- particularly the 2010 Simpson-Bowles plan that fell just short of a 14-vote threshold required to get before Congress -- the alchemy of Obama and the current Republican-controlled House, not to mention the ideologically diverse Senate, appears hopelessly inhospitable to bring something huge to the finish line.

As 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."

Republicans appear to agree.

"We'll continue to work on smart ways to cut spending," said Sen. Mitch McConnell of Kentucky, the Senate GOP leader. "But let's not let that stand in the way."

The list of unrealized goals from Obama and Boehner's last attempt at a grand bargain two weeks ago are breathtaking in their number, particularly when compared with the probable outcome. Ambitious plans to overhaul the individual tax code, tackle corporate rates, revamp the Medicare program and possibly consider changes in Social Security appear to have given way mainly to a tax increase for big earners.

Members in both the House and the Senate said perhaps that was OK.

"We can't do the task all at once," said Sen. John Hoeven, R-N.D. "I pushed for a big deal, but in this case, this time we can only get the tax piece done; so we need to move, we need to get it done."

Only Band-Aids

The downside of incrementalism is apparent every month in Washington, as a new battle emerges and legislative Band-Aids are affixed to fiscal gunshot wounds.

While Congress lurched Monday to a deal to avoid significant tax increases for millions of Americans, the emerging patchwork tax deal would push over a series of fights into the next Congress, most of them very likely to be marked by the same 11th hour rancorous dynamics that have been the signature of every other fiscal deal.

Most pressingly, Congress will have to come together as early as next month to lift the debt ceiling, which Republicans are already hoping to leverage to eke out more spending cuts. A similar fight almost led to default in 2011 and damaged the nation's credit rating.

In March, Congress will spar once 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.

It's likely that scheduled spending cuts to the Pentagon and other parts of government -- the result of last year's debt ceiling agreement -- will also be kicked into the new year, when Republicans and Democrats will likely repeat the recurring revenues-versus-spending cuts battle.

Because the sharply divided 112th Congress and the White House have repeatedly eschewed large-scale deals in favor of quick fixes, myriad bills left undone will now be in the hands of the 113th Congress set to convene at noon Thursday.

The bills range from a farm bill, which has expired and may result in soaring milk prices; a transportation bill; a funding mechanism to supplement the waning gas tax reserves to meet the nation's infrastructure needs; and even a measure, once completely uncontroversial, to prevent domestic violence.

Lots left to do

Also left to the new year is a bill to help states hit by Hurricane Sandy; the Senate passed such a measure last week, but, as has been the case with every disaster relief bill in this Congress, GOP and Democratic House members disagree on its spending level, and a final deal seems unlikely until the next Congress. The House was also set to vote Tuesday on a measure to deal with dairy prices.

Doing business in pieces may end up a more productive formula -- in the sense that walking 100 miles will still transport a person without an airplane or a bus -- but many outside Congress do not think such halting forward motion should be confused with actual success.

"That's the nature of the dysfunction," said Julian E. Zelizer, a professor of history and public affairs at Princeton. "For the parties, it gives them temporary cover and to fight again on the issues in the next few months. The parties please their base, but the country does not get a solution."

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