Get ready for the next Washington showdown.
The tax legislation that backed the nation away from the fiscal cliff only put off for two months dealing with sequestration or the $110 billion in automatic across-the-board military and domestic spending cuts that were scheduled to start Jan. 1.
The American Taxpayer Relief Act also did nothing to address to the $16.4 trillion debt ceiling, which the country reached on Monday. The Treasury Department will be able to continue paying bills for a few more weeks by taking some extraordinary measures, but Congress will have to raise the debt ceiling sometime between mid-February and mid-March. To paraphrase Rep. William L. Owens, Congress and the White House have fixed one leg of a three-legged stool.
And Democrats and Republicans are staking out the hard-and-fast positions that brought the country to the edge of the cliff, which was partly the result of a 2011 agreement to raise the debt ceiling to its current level.
President Obama said that he will not have another debate with this Congress over whether or not they should pay the bills that theyve already racked up through the laws that they have passed. One administration official later elaborated, saying the president is not entertaining any offers and not having any meetings about the debt ceiling.
Republicans, though, see the debt ceiling as leverage for securing spending cuts that were part of the 2011 deal. If they want to get the debt limit raised, they are going to have to engage and accept that reality, said Brendan Buck, a spokesman for House Speaker John Boehner.Republicans want changes to entitlement programs such as Medicare and Social Security, which Democrats have resisted.
Failure to reach agreement could result in a government default and a rise in interest rates that will drive up borrowing costs. Moodys Investor Service and Standard & Poors warned that no agreement could lead to a downgrade of government credit.
A new Congress has convened, but with the same leaders already sounding the same rhetoric, another cliff looms ahead.