The looming battle over debt and deficits falls to the 113th Congress, which will convene at noon Thursday with slightly more Democrats than the Congress that passed the deal this week to avert the cliff. While Democrats will control 55 of the Senates 100 seats, Republicans will retain a sizable majority in the House of Representatives.
The deal, which President Barack Obama is expected to sign into law, retains the Bush-era tax rates for all but individuals who earn more than $400,000 annually and families that make more than $450,000. The top rate, 35 percent last year, climbs to 39.6 percent.
Lawmakers readily conceded that the agreement does virtually nothing to reduce the nations $16.4 trillion debt. In fact, the debt will continue to grow every year over the next decade.
I hate this agreement. I hate it with every fiber of my being, because this is not the grand bargain that I hoped for, said Senate Budget Committee Chairman Kent Conrad, D-N.D., who voted for the deal nevertheless. This is not by any standard a deficit-reduction plan.
Budget watchdogs were equally unimpressed.
The main accomplishment of this bill was to make permanent most of the Bush tax cuts, and the Republicans seem to be ticked off about it and the Democrats are crowing about it. If you go back to 2007, this would have seemed like Alice in Wonderland, said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan budget-watchdog group. If you see it as an attempt to deal with the long-term structural deficit, its a near failure.
At the Capitol, partisan fury was as intense as ever on Wednesday, suggesting little hope for the kind of grand bargain Obama and Republicans have been seeking for years.
Lets hope Reid and President Obama resolve to be honest about the crisis our nation faces with the coming wave of entitlement obligations, said Rep. Ed Royce, R-Calif., referring to Senate Majority Leader Harry Reid, D-Nev., and to rising Medicare costs.
Hearing that, Rep. Sander Levin of Michigan, the top Democrat on the tax-writing House Ways and Means Committee, was annoyed.
That is not true, he said of Royces comment. It was the Republican leadership in the House that walked away from a big package.
Its unclear when talks will resume on a grand bargain. On spending reductions, the White House and House Speaker John Boehner, R-Ohio, were seen as close in the fall, with Obama proposing $1.2 trillion in spending reductions while Boehner offered $1 trillion.