So What Happens Now? Part 3 of 3 on the Fiscal Cliff

While the 112th Congress came to an agreement last night to avert huge spending cuts and tax increases, they left more decisions to be made by the 113th Congress that will be sworn in tomorrow.  Here are some of the highlights:

• Debt Ceiling: Even though the debt ceiling was the impetus leading to the "fiscal cliff," it remains a problem to be solved. The 2011 deal to raise the debt ceiling was expected to be a short term fix, and, as of December 31, 2012, the United States had once again hit the debt ceiling.  According to Secretary Geithner, the US can get by at the ceiling for two months.  The last time the debt ceiling was negotiated, the United States' credit rating ended up being decreased after Congress failed to come to an agreement.  The negotiation also set up automatic sequestration (funding cuts) to federal programs. Battle lines around the latest debt ceiling talks are already being drawn.
• Sequestration: After the Super Committee failed to come up with a long-term taxation/spending reform plan, automatic cuts to discretionary and non-discretionary federal programs on January 1, 2013.  Last night's deal postpones those cuts for two months and trims them down thanks to some new revenues.  $4 billion in 2013 cuts now need to be made by March 1 unless another solution is found. According to The Washington Post, Republicans are looking for targeted cuts that match amount set in sequestration ($113 billion over ten years), while the President wants to make the match through "balanced" spending cuts and new tax revenue.