ADVERTISEMENT

Deal sets stage for round two

  • Article by: ROSALIND S. HELDERMAN
  • Washington Post
  • January 1, 2013 - 10:47 PM
Deal sets stage for round two

WASHINGTON - The fiscal cliff was designed by Washington for Washington -- it was intended to set up a scenario so severe that the president and Congress would, at last, have to take on the nation's major tax and spending problems. Instead, lawmakers again found a way to sidestep many of the prickliest issues and in the process set up other, potentially more severe, showdowns in the new year.

"It's become less like a fiscal cliffhanger and more like a journey over the fiscal mountains," said Rep. Jeff Fortenberry, R-Neb.

The next big deadline is likely to come at the end of February, when the Treasury Department will exhaust its ability to extend the nation's $16.4 trillion debt ceiling. At that point, the government will not be able to pay its bills unless Congress votes to raise the nation's legal borrowing limit. Republicans hope to use that moment to force President Obama and Democrats to agree to major spending cuts in return for the increase -- in what could be a sequel to the face-off over the debt limit in summer 2011.

Another deadline will hit in early March: the $110 billion cut in spending, half from the Pentagon, delayed as part of this deal. A month or so later -- on March 27 -- a short-term measure that funds government agencies will lapse. Without a renewal, the government will shut down.

"Round two's coming," said Sen. Lindsey Graham, R-S.C. "And we're going to have one hell of a contest about the direction and the vision of this country."

Many Republicans believe they'll have more leverage then than they do now because the debate over tax rates on the wealthy will be settled. In their view, Obama has been wielding a powerful rhetorical weapon: that Congressional Republicans were blocking a deficit-reduction deal and preventing tax cuts for the middle class because they refused to allow taxes to rise for the wealthy. But the deal reached late Monday, which allows rates to rise for individuals making more than $400,000 a year and couples earning more than $450,000, would remove the issue from discussion. Republicans figure that will tilt the debate toward spending cuts.

But there's no guarantee a resolution becomes any easier in 2013. On Thursday, 12 new senators and 67 new House members take office.

"As well-intentioned as the new folks are, they don't even know where the bathrooms are," said Rep. Steve LaTourette, R-Ohio, who will retire Thursday. "And it's unrealistic to expect them to solve in 90 days what we haven't been able to solve in two years."

© 2014 Star Tribune