Jan. 2 Photo Brief: A fiscal cliff deal is made, Ray Lewis to retire, over-harvesting of fins, Hugh Hefner gets hitched
New fights emerge from “fiscal cliff” deal, Ravens linebacker Ray Lewis to retire, advocates worried about over-harvesting of fins in China, Hugh Hefner gets hitched and more in today’s daily brief.
Bigger fights loom after “fiscal cliff” deal
Thomas Ferraro and John Whitesides
Reuters | 3:59 p.m. EST, January 2, 2013
WASHINGTON (Reuters) – President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought “fiscal cliff” deal narrowly averted devastating tax hikes and spending cuts.
The agreement, approved late on Tuesday by the Republican-led House of Representatives, was a victory for Obama, who had won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans.
But it set up potentially bruising showdowns over the next two months on spending cuts and an increase in the nation’s limit on borrowing. Republicans, angry that the “fiscal cliff” deal did little to curb the federal deficit, promised to use the debt-ceiling debate to win deep spending cuts next time.
Republicans believe they will have greater leverage over Democrat Obama when they must consider raising the borrowing limit, likely in February.
The stakes are perhaps even higher in the debt issue than in the fiscal cliff because failure to close a deal could mean a default on U.S. debt or another downgrade in the U.S. credit rating. A similar showdown in 2011 ultimately led to a credit downgrade.
In fact, bond rating agency Moody’s Investors Service warned Washington on Wednesday it must do more to cut the deficit than it did in the “fiscal cliff” measure if the country is to turn around its negative sovereign debt rating.
Republican Senator Pat Toomey of Pennsylvania said his party had to be ready to do whatever it takes to get spending cuts.
“Our opportunity here is on the debt ceiling,” Toomey said on MSNBC. “We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean.”
Yet Obama may be emboldened by winning the first round of fiscal fights when dozens of House Republicans buckled and voted for major tax hikes for the first time in two decades.
Deteriorating relations between leaders in the two parties during the fiscal cliff episode do not bode well for the more difficult fights ahead.
Vice President Joe Biden and Republican Senate leader Mitch McConnell had to step in to work out the final deal amid frayed relations between House Speaker John Boehner and Obama.
Senate Democratic leader Harry Reid also drew the ire of Boehner, who told Reid in the White House to “Go fuck yourself” after a tense meeting last week, aides said. His retort came after the Democrat accused Boehner of running “dictatorship” in the House.
Bemoaning the intensity of the fiscal cliff fight, Obama urged “a little less drama” when the Congress and White House next address budget issues like the government’s rapidly mounting $16 trillion debt load. He vowed to avoid another divisive debt-ceiling fight ahead of the late-February deadline for raising the limit.
“While I will negotiate over many things, I will not have another debate with this Congress about whether or not they should pay the bills they have already racked up,” Obama said before he headed to Hawaii to resume an interrupted vacation.