The looming debt-ceiling fight: Worse than the fiscal cliff?

Congress avoided the most devastating effects of the fiscal cliff when the House gave its approval late Tuesday to a compromise that will preserve tax breaks for households making less than $450,000 a year. The deal also postpones, for two months, huge spending cuts that had been scheduled to begin taking effect Jan. 1. President Obama praised the agreement — which passed over the objections of most House Republicans — and urged lawmakers "not scare the heck out of folks quite as much" the next time they engage in a major fiscal debate. Good luck with that, says Joe Weisenthal at Business Insider. The next big showdown, over raising the federal debt ceiling, is coming up in February or early March, and both sides are already bracing for battle.

Since the agreement heading for Obama's desk doesn't raise the debt ceiling, which we've already hit, says Zachary A. Goldfarb at The Washington Post, it leaves "the Treasury to use what it calls 'extraordinary measures' as long as it can to pay the government's bills." When the bean counters run out of tricks, we could face a "catastrophic default" if Congress doesn't act fast.

Obama is still smarting from the 2011 debt-ceiling dispute, says Neil Munro at The Daily Caller. In that fight, "the GOP eventually pressured him to accept spending curbs in exchange for an increase to the debt limit up to $16.4 trillion." Obama has been complaining about that defeat ever since, and he's vowing not to let it happen again. But the GOP-led House is adamant about using "its authority over the nation's debt ceiling to pressure Obama to shrink future spending."

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The moment will be ripe for a spending debate, as the Treasury Department will be running out of cash just as the two-month postponement of the fiscal cliff's spending reductions, including deep Pentagon cuts, runs out. Once it can borrow nothing more, Treasury will have to rely solely on what it collects in taxes, which is only enough to pay 70 percent of its obligations. Brace yourselves, folks. The fiscal cliff is in the rearview, but we're barreling straight toward "Fiscal Cliff II."