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The Biden-McConnell Deal

There were a lot of theories floating around on how the fiscal cliff would finally be resolved.

There were a lot of theories floating around on how the fiscal cliff would finally be resolved. But, after long debates, the House Republicans approved the Biden-McConnell bill put forward by the Senate to avoid the fiscal cliff late Tuesday evening by a vote of 257 to 167.

The bill that came out of all the discussions includes an extension of Bush-era tax rates on all individuals making $400,000 or less ($450,000 for couples), unemployment benefits continue for two million unemployment workers, and a two-month delay in automatic spending cuts to the Pentagon and other Government agencies. However, it is important to remember that this fiscal cliff deal only delays the inevitable for about two months when the sequestration will kick in, the debt ceiling limit will be reached, and government funding will run out if the 113th Congress, which is sworn in Thursday, doesn't act.

So with the fiscal cliff being averted for now it is clear that the next fight in Washington will turn to spending. After the bill passed, Speaker John Boehner, R-Ohio, issued a statement saying: “The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”

After the passage of the bill, President Obama delivered an unprecedented late night briefing from the White House where he said, “I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they passed.  Let me repeat:  We can’t not pay bills that we've already incurred.”

So who has the upper hand? Be sure to tune in at 3 p.m. for the full conversation with Rana Foroohar from Time.