Obama, GOP will compete for leverage in upcoming battle over federal borrowing, spending
WASHINGTON -- President Obama had a clear political edge in his fight with Republicans over the fiscal cliff, and used it to his advantage. In the upcoming battle over federal borrowing and spending, the leverage will be more evenly divided and the outcome less predictable.
In the fiscal cliff fight, Obama wanted to block automatic New Year's Day tax increases on everyone but the country's highest earners. Republicans were trying to protect upper-income people from those tax hikes, but eventually gave in because they didn't want to be blamed for the higher middle-class taxes that a stalemate would have triggered.
Next come three deadlines that will almost certainly become entwined.
The government will run out of cash in about two months. The Obama administration will need congressional approval to borrow more money or face a first-ever federal default, threatening global, economy-rattling consequences. House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., have said they won't agree to a debt-limit extension without an accord to cut spending. Just as adamantly, Obama says the government's debt ceiling must be raised and he won't negotiate over it, though he says he would bargain over spending cuts and tax increases to reduce federal deficits.