President Barack Obama used his bully pulpit Tuesday to warn of calamitous consequences for the U.S. economy should the automatic spending cuts known as the “sequester” go into effect next Friday.

The president warned that the automatic cuts, totaling about $85 billion over the course of this year, would prompt job losses, weakened national security and canceled government services – among other consequences.

“So these cuts are not smart, they are not fair, they will hurt our economy, they will add hundreds of thousands of Americans to the unemployment rolls,” Obama said in a statement at the White House. “This is not an abstraction; people will lose their jobs. The unemployment rate might tick up again.”

The speech featured no new, concrete proposal from the president detailing how he would prefer for Congress to replace the sequester.

Democrats in Congress released a plan last week that called for $55 billion in new revenues from closing tax loopholes and deductions, and additional cuts by $27.5 billion to each the defense and discretionary spending budgets over the course of the next decade.

Obama’s speech was otherwise spent reiterating points he’s made for the better part of the last two months. He said that any sequester replacement should be “balanced” – shorthand for a combination of new tax revenue and spending cuts – and Obama urged lawmakers to approve a shorter-term replacement for the automatic cuts if they couldn’t reach consensus on a broader package by the end-of-February deadline. 

Rather, the president, who was flanked by first-responders whose jobs Obama said would be threatened by the sequester, was making use of political optics and the presidential bully pulpit to pressure Congress to act. 

Still, the urgency appeared to have little effect on Republicans, who dismissed the president’s remarks as unserious about reaching a solution. 

"Once again, the president offered no credible plan that can pass Congress – only more calls for higher taxes," House Speaker John Boehner, R-Ohio, said in a statement.

“Today's event at the White House proves once again that more than three months after the November election, President Obama still prefers campaign events to common sense, bipartisan action,” Senate Minority Leader Mitch McConnell, R-Ky., said in a statement. 

Indeed, many Republicans have treated the sequester as a fait accompli; Congress is out of town this week, and lawmakers would only have a handful of days next week to act upon the sequester. Some Republicans have also argued that even if the sequester is replaced, its $85 billion in cuts should set a baseline for offsetting cuts in other areas of the budget. 

“I have to say, though, that so far, at least, the ideas that the Republicans have proposed asks nothing of the wealthiest Americans or biggest corporations,” Obama said of the GOP proposal. “So the burden is all on first-responders or seniors or middle-class families. They doubled down, in fact, on the harsh, harmful cuts that I've outlined.”

The president added, as if to drive home the point: “Well, that's not balanced. That would be like Democrats saying we have to close our deficits without any spending cuts whatsoever. It's all taxes. That's not the position Democrats have taken, that's certainly not the position I've taken.”

This story was originally published on Tue Feb 19, 2013 11:04 AM EST

Republicans are dug in as ever against raising new taxes, and their budgetary standard-bearer, Wisconsin Rep. Paul Ryan, said Sunday that the Republican House of Representatives has already moved past the question of new revenues. 

Ryan, the House Budget Committee chairman and former GOP vice presidential nominee, laid out the contours of what will almost certainly be a bruising springtime debate on taxes and spending — an outgrowth of the unresolved consequences of the "fiscal cliff."

And as the GOP-held House and the Democratic-controlled Senate prepare dueling budget proposals, Ryan argued that the president was unserious about tackling the mounting national debt. 

"The president got his additional revenues. So that's behind us," Ryan said on NBC's "Meet the Press" in his first live interview since the presidential election, when Ryan and presidential candidate Mitt Romney lost decisively to President Barack Obama. 

During the campaign, Romney and Ryan talked forcefully about reforming taxes and raising revenues by closing loopholes and deductions that favor the wealthy. While Democrats won higher taxes on household income over $450,000 as part of the New Year's deal to stave off the automatic tax hikes and spending cuts in the fiscal cliff, Democrats now say they'll produce a budget asking for even more revenue, possibly through similar tax reforms.

"Are we for raising revenues? No we're not," Ryan said. "If you keep raising revenues, you're not going to get decent tax reform."

The Wisconsin congressman's comments portend a debate over taxes and spending in Washington featuring parties as far apart as ever. Republicans this week passed legislation to suspend the debt limit — and, with it, the specter of default — until May. But Congress must still reckon with the need to continue funding the government, and address the automatic and drastic spending cuts (known as the "sequester") that were delayed only for two months as part of the fiscal cliff.

"I think the sequester's going to happen," Ryan said, blaming Democrats for offering no palatable substitute for those cuts. 

And Ryan said that Republicans were "not interested" in a government shutdown, the consequence for which some GOP lawmakers have openly called should Obama and lawmakers fail to reach an agreement to fund the government.

But those looming questions — which are tied directly into the budgets that the House and Senate will debate this spring — reflect how Washington remained as vexed as ever by fiscal issues. 

And the rhetoric is hot as ever, too.

"I don't think that the president actually thinks we have a fiscal crisis," Ryan said. 

With tax and spending matters set to dominate much of lawmakers' energy for the first half of this year, it could make other elements of Obama's agenda — like immigration reform and curbing gun violence — more politically difficult. 

Ryan, who has praised a bipartisan set of immigration reforms offered by Florida Sen. Marco Rubio, R, said he was cautiously optimistic about the prospects for immigration reform this year. But Ryan said that Democratic and Republican lawmakers alike would closely watch Obama's speech on Tuesday in Nevada on that topic.

And of the president's gun control measures, Ryan suggested openness to embracing some measures — like requiring universal background checks on gun sales — while expressing skittishness toward other elements of the plan, like the ban on assault weapons.

As Ryan himself navigates these very thorny issues for the next four years, his every action will be refracted through the prism of 2016 presidential politics. After having emerged as something of a GOP rock star as Romney's running mate last fall, many Republicans hope that the Wisconsin congressman might seek the presidency himself in four years, joining a tentative field of Republican contenders for the nomination that is full of proverbial heavyweights.

Ryan offered a familiar answer about his own potential ambitions, saying he doesn't think about running, and that he was currently focused on his job serving his constituents. 

"I think it's just premature. I've got an important job to do," he said. "I'll decide later about that."

Updated 2:26 p.m. - Republicans will act to push the deadline at which the U.S. government would default on the national debt to mid-April, demanding that Democrats pass a budget in exchange for a long-term extension in borrowing authority.

House Republicans said they will take up legislation next week to temporarily extend the debt limit for three months, past the mid-February deadline when the government, according to the Treasury, would reach its legal limit on borrowing to finance the government's obligations.

"Next week, we will authorize a three month temporary debt limit increase to give the Senate and House time to pass a budget," House Majority Leader Eric Cantor, R-Va., said. "Furthermore, if the Senate or House fails to pass a budget in that time, members of Congress will not be paid by the American people for failing to do their job. No budget, no pay."

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"We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on," White House press secretary Jay Carney said in response. "Congress must pay its bills and pass a clean debt limit increase without further delay."

Such a move would push the deadline for default to mid-April, around the time at which the House and Senate are typically expected to produce and pass budgets. To secure a longer-term extension in the debt ceiling, Republicans said Friday, the Senate must finally pass a budget.

"Before there is any long-term debt limit increase, a budget should be passed that cuts spending," House Speaker John Boehner, R-Ohio, told GOP lawmakers at the conclusion of their retreat, according to remarks released by his office.

Republicans have vocally criticized the Democratic-controlled Senate for failing to produce a budget in recent years, a mark of the upper chamber's unseriousness in the eyes of many conservatives. Democrats have used the two budgets authorized by House Republicans as a political cudgel against the GOP; the Senate's failure to pass a budget has been partially meant to escape similar political culpability.

"We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem," Boehner said. "The principle is simple: no budget, no pay."

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Republicans' new strategy cuts against a strain of thought within the GOP that suggests that default would not be as catastrophic for the economy as many experts have warned. These Republicans have argued for using the debt ceiling deadline -- and the specter of default -- as leverage to extract spending cuts or entitlement reforms from President Barack Obama.

"It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage," Senate Majority Leader Harry Reid, D-Nev., said in response. "If the House can pass a clean debt ceiling increase to avoid default and allow the United States to meet its existing obligations, we will be happy to consider it."

But Republicans are facing increasing political pressure to act, and prevent default. The party's favorable/unfavorable rating was near its worst ever in Thursday's NBC News/Wall Street Journal poll following a drawn-out battle over the fiscal cliff, a political fiasco many Republicans aren't eager to repeat. And Obama gave a press conference earlier this week explicitly refuse bargaining over the debt limit.

J. Scott Applewhite / AP

Speaker of the House John Boehner, R-Ohio, right, and House Majority Leader Eric Cantor, R-Va., left, walk to a second Republican conference meeting to discuss the fiscal cliff bill passed by the Senate Monday night and now awaits a vote in the GOP-controlled House, at the Capitol in Washington on Tuesday, Jan. 1, 2013.

In recent days, high-profile Republicans had steadily backed away from the prospect of defaulting on the national debt, sending signals that they'll extend the nation's borrowing authority for at least a little while longer.

"We will raise the debt ceiling. We're not going to default on our debt," Texas Sen. John Cornyn, Republicans' No. 2 in the upper chamber, told the editorial board of the Houston Chronicle. "I will tell you unequivocally, we're not going to default."

And Rep. Paul Ryan, R-Wis., the House Budget Committee chairman and former vice presidential nominee, told reporters at House Republicans' retreat on Thursday that lawmakers were "discussing the virtue of a short term debt limit extension."

They join Republican Sens. Susan Collins of Maine and Lisa Murkowski of Alaska, in acknowledging the need for a debt ceiling increase; more and more members of the conservative media have also questioned the political wisdom behind using the debt limit as leverage in the spending debate.

What's more, traditionally GOP-friendly business groups have privately urged lawmakers against wrangling over the debt limit, which has become a factor weighing upon Republicans' strategy.

"There was serious displeasure and concern within the financial services community over the way Republicans handled the debt ceiling issue in 2011," said one business advocate tied into Republican politics. "It was the financial community that helped deliver the resources for a Republican takeover in 2010 and now House Republicans are at risk of jeopardizing their credibility with their free market allies. Cutting spending and helping the economy are not mutually exclusive, but republicans have found a way to make it seem that way in the eyes of voters."

Veteran budget experts said Tuesday that it may require a U.S. sovereign debt crisis to finally force President Barack Obama -- or some future president -- and Congress to agree on truly fundamental changes in fiscal policy.

Last week’s overwhelming bipartisan agreement between Obama and Congress enacted modest income tax increases for most workers (an average tax hike of about $364 in 2013, according to the Tax Policy Center), a return to the full 6.2 percent Social Security payroll tax, and a two-month postponement of the “sequester,” the mandatory spending cuts required by the Budget Control Act. The deal made no changes in long-term spending or in the design of the entitlement programs such as Medicare.

Back in 2011, Obama signed the BCA into law in return for Congress agreeing to a higher federal borrowing limit. The law’s automatic spending cuts were designed to be the ultimate “action-forcing event” that would nudge Obama and Congress into clinching a historic bargain: entitlement reform and spending curbs combined with tax increases.

But three former Congressional Budget Office directors who assembled at a panel discussion Tuesday at the Urban Institute agreed that Congress’s attempt to design an action-forcing mechanism had failed. “I’m really at a loss for what kind of thing might cause the Congress to act in a sensible way,” said former CBO director Rudolph Penner. “We’ve reduced the credibility of something like a sequester. It’s just hard to come up with artificial crises of that sort.”

The BCA itself was supposed to be the action-forcing device – and it resulted only in postponing significant deficit reduction, not forcing it. According to the Congressional Budget Office, the deal Obama signed last week will increase spending and reduce tax revenues by nearly $4 trillion between now and 2022, compared to what would have happened if he and Congress had done nothing.

Another deadline – or another occasion for postponing action -- comes when the Treasury hits the government’s borrowing limit in late February or early March. Then at the end of March, an interim spending resolution expires. If Congress takes no action before that happens, parts of the government may shut down and federal employees could be furloughed for one day a month.

Penner said Tuesday that “those old warriors” – Vice President Joe Biden and Senate Republican Leader Sen. Mitch McConnell – might once again devise a stopgap, perhaps again postponing spending cuts and raising the borrowing limit.

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Penner said he saw no reason to change the forecast he has been making for a long time: “It’s going to take a sovereign debt crisis to get our leaders to act responsibly. If that does happen, I think groups like the AARP -- who have adamantly opposed even the tiniest of reforms of entitlement spending – will see that they have been very short-sighted. Their constituents will be hurt mightily” in a U.S. sovereign debt crisis by seeing their retirement savings evaporate amid a market crash.

A sovereign debt crisis would arrive if bond market investors concluded that the ratio of federal debt to U.S. national income was so high that it created doubts about full and timely repayment of money lent to the Treasury. Investors would force interest rates sharply higher to compensate for the perceived increase in risk.

Sovereign debt crises, or near-approaches to them, in Greece and other countries have resulted in dramatic cuts in government benefits without much advance warning, Penner said.  

He said he was puzzled that financial markets didn’t show a bigger reaction to the fiscal uncertainty in the run-up to last week’s accord, but he cautioned “markets tend to remain very, very calm as the budget situation deteriorates – until one day they don’t (remain calm). It’s not a gradual process…. These things are essentially impossible to predict, they can be set off by a bit of bad budget news on an otherwise slow news day.”

But former CBO acting director Donald Marron said his view was that “the hypothetical fiscal crisis for the United States is still many years in the future.”

Former CBO director Robert Reischauer warned that the Federal Reserve’s policy of keeping short term rates ultra-low “has eliminated one of the signals that the public and markets and (political) leaders look to in forcing action” on budgets. With such low interest rates, the federal government’s borrowing costs are not painful.

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The CBO reported Tuesday that there were signs of modest improvement in the budget picture in the short term: total tax receipts increased by 11 percent in the first quarter of fiscal year 2013 – and that came even before the tax increase that Obama signed into law last week. The 2013 fiscal year began on Oct. 1, 2012.

Spending was about the same in the first quarter of 2013 as it was during that period in 2012, when adjusted for shifts in the timing of certain payments due to weekends and holidays. Defense outlays were $9 billion (or 5 percent) less than in the same period last year.

But the bad news was that interest payments are already edging up, even without a sovereign debt crisis or a spike in interest rates.  The CBO said outlays for interest on the public debt were 7 percent greater than in the same period a year earlier, reflecting in part the growing debt held by the public.

For some Democrats, a lingering regret from last week’s deal is that Obama did not extract higher tax revenues; they worry that having agreed to income tax increases that largely fall on the top one percent of earners, the president won’t be able to persuade Congress to enact more tax increases this year or in 2014.

Larry Downing / Reuters

The Capitol Dome is seen on Capitol Hill, Nov. 9, 2012. To the left is the House of Representatives.

“The amount of revenue that was generated by the deal was far lower than the president and the Democrats had hoped for, and even lower than the amount the Republicans seemed willing at various times to put on the table,” noted Reischauer.

He added that last week’s deal will create the impression that higher income tax rates “are off the table in the future” – which he said was “very damaging” since higher federal revenues will be needed over the next few decades. He added that in order to provide the services and benefits Americans expect and to keep deficits and debt at sustainable levels, “we’re going to have to increase taxes on not (only) the (top) 1 percent, not the 2 percent, probably not the 20 percent, but the 30 or 40 percent of Americans. The sooner we face up to that, the sooner we can get on to other important issues that the government should be addressing.”

Noting that Obama had campaigned on sparing the middle class from having to pay any tax increases, Penner noted that that left the very high earners as the only source of more revenue. But, he said, “The arithmetic clearly shows that you can’t solve this long-run budget problem without the middle class making a contribution. The problem with rich people is that there just aren’t enough of them.”

Senate Minority Leader Mitch McConnell said Sunday that Republicans will not support more revenue-raising measures in future fights over the nation's deficit, saying that President Barack Obama should lead on addressing spending cuts alone.

"That's over," McConnell said on NBC's Meet the Press when asked about possible new streams of revenue through taxes or tax code reforms.

"We've resolved this issue," McConnell said. "We don't have this problem because we tax too little, we have it because we spend way, way too much. So we've settled the tax issue and now we have to address the single biggest threat to America's future, and that's our excessive spending."

McConnell helped broker an eleventh-hour deal to avert the fiscal cliff last week, a bill that included the expiration of Bush-era tax rates for some of the wealthiest Americans. On Sunday, McConnell defended that deal, opposed by many House Republicans despite an overwhelming bipartisan deal in the Senate.

"Look, this was not a tax increase," he said of the fiscal cliff agreement. "It was not the kind of complete deal we'd like because we want to cut spending but we did stabilize taxes. The tax issue's behind us." 

McConnell did not answer repeated questions about whether or not he would use the threat of a government shutdown to force Democrats' hand on spending cuts.

"I know what your question is," he told host David Gregory. "What I'm telling you is I have not given up on the president stepping up to the plate and tackling the biggest issue confronting the country.

President Barack Obama has signed a bill that boosts taxes on the wealthiest Americans, while preserving tax cuts for most American households.

The bill, which averts a looming fiscal cliff that had threatened to plunge the nation back into recession, also extends expiring jobless benefits, prevents cuts in Medicare reimbursements to doctors and delays for two months billions of dollars in across-the-board spending cuts in defense and domestic programs.

The GOP-run House approved the measure by a 257-167 vote late Tuesday, nearly 24 hours after the Democratic-led Senate passed it 89-8.

Obama, who is vacationing in Hawaii, signed the bill using an autopen, a mechanical device that copies his signature. 

Roger L. Wollenberg / Getty Images

House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid, Speaker of the House John Boehner and Senate Minority Leader Mitch McConnell speak to the media at the White House on Nov. 16, 2012.

Four months ago, the United States Congress had a gloomy approval rating of just 12 percent. And that was before most Americans had ever heard of a "fiscal cliff." 

The last NBC News/Wall Street Journal poll to measure congressional approval (August), showed that a whopping 82 percent of Americans disapproved of the job Congress was doing, an all-time record for the history of the survey.

By some estimates, Congress' approval rating could now -- after an ugly fiscal cliff fight and the brewing storm over aid to Hurricane Sandy victims -- be nearly within the margin of, well, zilch. 

Big policy losers in tax deal: deficit reduction and 'certainty'

So is Congress doomed to forever be the branch of government eating alone in the proverbial cafeteria of public opinion? And can it go any lower?

For the last four years, no more than one-in-three adults has given Congress a thumbs up, according to the poll. And it's been longer than a decade since more than half of Americans approved of their representative government on Capitol Hill.

Experts say that because the ratings have been so poor for so long, members are no longer fazed by the public's overall disapproval. They note that the lambasting of Congress as a whole has minimal effects on individual races, especially when candidates run against the status quo of the very body they're trying to join.

Some 90 percent of lawmakers who ran for re-election in 2012 will be coming right back to Capitol Hill for the 113th Congress. 

"Nobody ever votes on Congress as a whole, they vote on individual members," says Jack Pitney, professor at Claremont McKenna College in California. "The message that most lawmakers give their constituents is 'I'm great, it's these other bozos who are the problem.'"

For the most part, that pitch works.

'Everybody has something to hate'
In the August NBC/WSJ poll, even though only about one-in-ten Americans approved of Congress, four times as many said that their own representatives deserved re-election.

Apart from keeping the same lawmakers they seem bent on throwing out, the public has also sent mixed signals on whether or not it wants a government divided between two parties.

For more than 20 of the last 30 years, the White House has been controlled by a different party than one or both houses of Congress.

Boehner likely to be reelected speaker, but there could be drama

With Congress frequently butting heads with the president -- particularly on budgetary matters that could have real and unpleasant consequences for American taxpayers -- it's not easy for lawmakers to compete for a "Miss Congeniality" trophy.

"These fights, combined with difficult economic times, leave the public to understandably think very poorly of the Congress," says Thomas Mann, a senior fellow at the Brookings Institute and the co-author of a recent book on political dysfunction.

"I don't think it's destined to always be that way, but when you have a war going on between the two major parties, not just during campaign season but throughout the governing season, then it's not surprising for Congress to get these kind of ratings," Mann said. 

Making matters worse for Congress: the issues at stake often involve spending cuts and federal program changes likely to affect voters directly -- many of them negatively.

"We have an enormous deficit and the only steps that we can take to reduce the deficit are painful and unpopular," says Pitney. "Plus, you have split party control, so everybody has something to hate."

Public wants unity
In a model divided government, the Congress would serve -- at least in principle -- to cancel the most partisan priorities from the executive branch in favor of centrist ideals.

But with that rosy idea of balance often replaced by inaction and gridlock, polling suggests that the country may be shifting toward a preference for unity.

A recent Gallup survey showed that the number of Americans who said they want to see divided government is at record lows, with just 23 percent favoring a president and a Congress from different parties.

What the fiscal deal means for you

That's a finding that Brock McCleary, the former deputy executive director of the National Republican Congressional Committee and founder of the survey firm Harper Polling, has seen replicated in polls throughout various House districts.

"Our assumption was voters would want one branch of government as a nice check and balance on the other one and think that as long as everyone's tapping the brakes on one another it's probably better for the country," he said. "But we would go and look at polling and find that wasn't actually the case. Very few people were telling pollsters that's what they wanted."

But, McCleary added, that sentiment didn't translate into change in the two most recent elections in 2010 and 2012, which resulted in a Republican House despite a fairly decisive re-election for a Democratic president.

"There's a disconnect there," he said.

With divided government in place for at least the next two years, and with the vast majority up for re-election likely to return each year -- Congress's best hope may ultimately depend on the economy that each party aims to improve. But in the immediate future, those prospects look bleak.

"People generally need to feel as though the country is back on the right track," said McCleary. "Until that turns around it, sliding approval numbers are a fact of life for American politicians."

WASHINGTON -- The House of Representatives adjourned on Tuesday night without acting on a $60 billion superstorm Sandy disaster aid bill, prompting angry denunciations from members from the states hardest hit by the storm.

The GOP leadership was criticized for what one Republican called a "personal betrayal" after it was decided that the bill would not be considered until the 113th Congress, which convenes at noon on Thursday.

The current session of the House comes to an end officially on Wednesday after the new Congress elected in November gets sworn in. Legislation does not carry over from session to session, so consideration of an aid bill would have to start all over if, as expected, nothing is scheduled before then.

"I have just been informed that we will be having perhaps no further votes in this Congress," said Democratic Representative Steny Hoyer of Maryland. "I am deeply disappointed at that information. We have millions of our fellow citizens who have been badly damaged by a storm called Sandy."

"We help each other," Representative Rush Holt, a Democrat of New Jersey, said on the House floor. "We always have ... There are thousands of people who are not going back to their homes. They deserve our help."

Slideshow: Recovering after Sandy

Mario Tama / Getty Images

Residents of the Northeast are still picking up the pieces after Superstorm Sandy.

Launch slideshow

They and others pleaded with the Republican leaders of the House to rethink the decision, but few were in the chamber to listen. House Speaker John Boehner of Ohio and Majority Leader Eric Cantor of Virginia are in charge of scheduling the House.

"For the Speaker to just walk out is inexcusable," Representative Peter King, a New York Republican, told reporters. "It's wrong and I'm saying that as a member of the Republican Party."

'Unforgivable'
In a statement, a spokesman for Boehner said: "The Speaker is committed to getting this bill passed this month." That assurance was not enough for the members who have districts that were affected by Sandy.

"I feel it is a personal betrayal," said Representative Michael Grimm, a New York Republican. "But I think more importantly, when you parse out all the politics, the people of this country that have been devastated are looking at this as a betrayal by the Congress and by the nation, and that is just untenable and unforgivable."

A bipartisan group of eight lawmakers gathered after protesting the move on the House floor after the House voted late Tuesday night to pass a bill to avert the so-called "fiscal cliff." That bill passed 257-167.

The October 29 storm devastated New York and New Jersey coastlines with lesser damage felt along coastal areas of Delaware and Maryland.

The Senate passed a bill on December 28 by a vote of 61-33 that would provide $60.2 billion in additional aid to victims of superstorm Sandy.

During that vote, 12 Republicans supported the measure, but only after a replacement amendment that would have stripped $35 billion from the bill failed to pass.

Full Sandy coverage from NBC News

"It passed the Senate in a bipartisan way," said Representative Nita Lowey, a New York Democrat. "And again, to me this is a real betrayal, a betrayal of the leadership of the Republican Party."

The House had originally planned to consider a two-step bill that would start with $27 billion in supplemental aid, but also include an amendment worth an additional $33 billion.  The bill had been split to allow conservative Republicans to vote for a base level of additional aid, but not the entire package, which many Republicans said did not entirely go to those affected by Sandy.

"If we get into the next Congress, you have to hit the reset button," said Representative Jon Runyan, a New Jersey Republican who added that the Sandy aid package has been largely drowned out in recent days by negotiations over the "fiscal cliff" tax hikes and spending cuts that were set to kick in starting on Tuesday.

J. Scott Applewhite / AP

Rep. Peter King, R-N.Y., left, joined by other New York area-lawmakers affected by superstorm Sandy, express their anger and disappointment after learning the House Republican leadership decided to allow the current term of Congress to end without holding a vote on aid for the storm's victims, at the Capitol in Washington, early Wednesday.

Many Republicans in Congress say that the Sandy aid bill contains billions of dollars in spending on projects unrelated to damage caused by the storm or for long-term infrastructure improvements that should compete with other discretionary spending.

Among expenditures criticized was $150 million to rebuild fisheries, including those in the Gulf Coast and Alaska, thousands of miles from Sandy's devastation, and $2 million to repair roof damage that pre-dates the storm on Smithsonian Institution buildings in Washington.

Democrats, including New York and New Jersey senators, have argued that long-term rebuilding projects such as tunnel repairs would be delayed if the full funding was not approved. They say that businesses would not start to rebuild if they were not confident of reimbursement.

An aide for Cantor said that the House Majority Leader "is committed to ensuring the urgent needs of New York and New Jersey residents are met, and he has been working tirelessly toward that goal."

NBC News' Frank Thorp and Reuters contributed to this report.

The last-minute deal-making on Capitol Hill may have helped avert the fiscal cliff for now, but many commentators expressed pessimism over the agreement and the distressing sight of lawmakers allowing the world’s largest economy to teeter near economic disaster.

“This is a bad bill that made a bad situation worse,” Richard Haas, the president of the Council on Foreign Relations, said Wednesday on MSNBC’s Morning Joe.

“The only thing it did was avoiding sending the signal (to the rest of the world) that we’re reckless and out of control,” he added.

Consumers, businesses and financial markets have been rattled by the months of budget brinkmanship. The crisis ended when dozens of Republicans in the House of Representatives buckled and backed tax hikes approved by the Democratic-controlled Senate.

But even with the agreement, more budget drama is expected on the way. In February, Congress will have to decide what to do about a slew of other spending cuts. Then, in March, lawmakers will decide on whether to increase the federal borrowing limit.

“We could see an early lift in the markets because of relief the deal went through,” Gary Thayer, the chief macro strategist at Wells Fargo Advisors, told The New York Times. “The response may be muted because the deal left out many long-term issues.”

'A missed opportunity'
Erskine Bowles and Alan Simpson, who headed a deficit commission for Obama, said lawmakers missed a "magic moment to do something big" for the American economy.

“The deal approved today is truly a missed opportunity to do something big to reduce our long term fiscal problems, but it is a small step forward in our efforts to reduce the federal deficit,” they said in a joint statement released Tuesday.

PhotoBlog: Deal done, Obama heads back to Hawaii with a weary wink

In a scathing editorial, the Wall Street Journal called for the parties to go their own ways in Congress and tried to rally Republicans against Obama.

“Having been cornered into letting Democrats carry this special-interest slag heap through the House, Speaker John Boehner should from now on cease all backdoor negotiations and pursue regular legislative order. House Republicans should pursue their own agenda and let Mr. Obama and Senate Democrats pursue theirs. Mr. Obama has his tax triumph. Let it be his last,” it wrote on the editorial page.

Economists had been warning that the tax increases and spending cuts could take a chunk out of the U.S. economy.

PhotoBlog: Behind the scenes as Congress works overtime

But early Wednesday, world markets registered relief over the deal.

Benchmarks in Australia and Hong Kong boomeranged on the first trading day of the year. Asian markets had slipped on Monday, fearing that negotiations over the measure might collapse.

Many analysts were gloomy about long-term prospects.

“The process was so chaotic and the outcome so unsatisfactory that we are likely to see a further U.S. downgrade at some point,” Steven Englander, fixed-income strategist at Citi, wrote in a research note.

But China's state news agency Xinhua took a more severe view, warning the United States must get to grips with a budget deficit that threatened not a "fiscal cliff" but a "fiscal abyss." Most of China's $3.3 trillion foreign exchange reserves are held in dollars.

Bipartisan outrage after House skips vote on $60 billion Sandy aid bill

For the Washington Post, the entire episode was depressing.

The newspaper expressed discouragement for what the episode suggests for political compromise going forward.

“The United States will have to wait longer yet for its inevitable budget reckoning,” it wrote in an editorial.

“We hope the nation’s leaders will be able to accomplish in stages what they have been unable to do in a series of self-imposed crises: raise more revenue and significantly reduce future entitlement spending. But the fiscal cliff episode offers little encouragement,” the newspaper concluded.

Reuters and The Associated Press contributed to this report.

Updated at 12:32 a.m. ET: An agreement to stave off the harshest and most immediate consequences of the fiscal cliff won approval in the House late Tuesday. President Barack Obama signed the law on Wednesday night, the battle over which foreshadowed more fights with Congress over spending.

Following a day of hectic wrangling on Capitol Hill — where the prospects for passing the bipartisan, Senate legislation regarding the fiscal cliff hung in the balance for much of New Year's Day — the House voted 257 to 167 to pass the belated compromise measure over the objections of many conservative Republicans.

The legislation takes steps toward resolving the combination of automatic tax hikes and spending cuts that took effect at midnight on Jan. 1. It preserves tax rates as they were at the end of 2012, except for those individuals earning more than $400,000 and households earning over $450,000. It also allows taxes on capital gains and dividends to go up, and extends benefits of the unemployed. Additionally, the Senate bill delays the onset of the "sequester" — the swift, automatic spending cuts — for two months. 

Fiscal cliff compromise leaves few satisfied

"Thanks to the votes of Democrats and Republicans in Congress I will sign a law that raises the taxes on the wealthiest of Americans," Obama said in remarks at the White House Tuesday, "while preventing a middle-class tax hike."

The House vote laid bare some of the internal ideological divisions to plague the GOP over the past two years. More Republican congressmen (151) voted against the Senate bill than for it (85), meaning that Democrats' support was needed to advance the final deal. House Speaker John Boehner, R-Ohio, took the rare step of casting a vote, and did so in favor of the legislation. Rep. Paul Ryan, R-Wis., the former Republican vice presidential nominee, also supported the package. But Boehner's top two lieutenants, Majority Leader Eric Cantor, R-Va., and Majority Whip Kevin McCarthy, R-Calif., each opposed the deal.

"Now the focus turns to spending," Boehner said in a statement following the House vote. "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."

While the last-minute action on Capitol Hill essentially mitigates much of the risk posed to the U.S. economic recovery by the fiscal cliff, it hardly brings resolution to the bitter and often intractable fight in Washington over taxes and spending. The first half of 2013 will feature battles in Congress over raising the debt limit, continuing basic government funding and the expiration of this two-month delay in the sequester. 

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Obama nodded to those looming fights in his remarks Tuesday evening, renewing his call for "balance" in any solution in the coming year to address deficits and debts. But the president also sternly warned Congress against using the debt ceiling as a bargaining chip, as Republicans had in summer of 2011.

"While I'll negotiate over many things, I will not have another debate with this Congress over whether to pay the bills they have racked up," Obama said.

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The fiscal cliff itself was the product of discord in Congress resolving those very issues. And the difficulty in attaining even this less ambitious piece of legislation — versus the kind of "grand bargain" Obama had first sought in talks with Republicans — offered a cautionary tale for the 113th Congress, in which the House and the Senate remain controlled by the same parties as during the past two years. 

Squabbling
And even for much of Tuesday, House approval of the fiscal legislation — which was negotiated by Senate Minority Leader Mitch McConnell, R-Ky., and Vice President Joe Biden — was far from certain. GOP leaders were forced to cajole conservatives who complained the fallback deal contained insufficient spending cuts. Only after it became clear that Republicans wouldn't have the votes to amend the Senate proposal — which the upper chamber said it wouldn't even consider — did House Speaker John Boehner, R-Ohio, bring the bill to the floor. 

The squabbling was familiar to any observers of Congress during the past two years. This divide almost resulted in a government shutdown and a default on the national debt in 2011. It again threatened Tuesday to allow the painful, across-the-board tax hikes and spending cuts to play out just as the U.S. economic recovery showed signs of accelerating.

PhotoBlog: See images of Congress working overtime to avoid fiscal cliff

And this deal just approved by Congress in the waning hours of 2013's first day all but ensures that much of the coming year will be dominated by similar battles in Washington. Republicans are hopeful they might be able to extract more spending cuts and entitlement reforms with the government up against other deadlines, like the one needed this spring to authorize more government borrowing. 

That could complicate Obama's already-ambitious second term agenda. The president said just this past Sunday on NBC's "Meet the Press" that he will seek comprehensive immigration reform legislation and new laws to address gun violence.