Fiscal cliff debate: what happens next on Capitol Hill?

After voting to avert tax hikes for most Americans while raising them on the wealthiest, the 112th Congress is nearly over. MPR News' Washington reporter Brett Neely discusses the aftermath of the fiscal cliff debate and what happens next on Capitol Hill.

MPR News: We've heard a lot about some provisions of the agreement — such as the tax hikes. Are there any that get less attention but are important to states such as Minnesota?

Brett Neely: Yes, primarily in the area of alternative energy. Part of the final deal included what's known here as the "tax extenders" — a variety of tax breaks that expire every year or two.

Most of them got renewed and several biofuel tax credits were renewed, especially for an emerging form of ethanol called cellulosic ethanol that is made from various grasses and agricultural waste.

Another important energy tax credit that was renewed covers wind power. Minnesota is the fifth biggest producer of wind power in the country and many wind farm builders said letting the credit expire entirely would have been catastrophic for their industry.

One tax issue that is not in the bill is a delay of the medical device tax that went into effect on Jan. 1.

Republicans and Democrats alike from Minnesota sought to protect some of the big device companies in the state such as Medtronic but they came up short.

MPR News: I understand that Minnesota's U.S. House delegation was evenly divided. What were the fault lines?

Brett Neely: It wasn't a normal Democrats vs. Republicans breakdown at all.

Even though Republicans brought the bill to the floor, John Kline was the only Minnesota Republican to vote for it; the other three opposed it because they don't back tax hikes and the bill didn't cut spending.

In fact, only about one in three Republicans supported it and many of them were like Kline and are close political allies of House Speaker John Boehner.

Of the Democrats, only Collin Peterson opposed it. He is one of the last of a dying breed on Capitol Hill of fiscally conservative Democrats and he told me today he could not back it because the plan was not big enough.

That is a bit of a complicated issue because the spending he is talking about also refers to the budgetary accounting for the cost of making the Bush tax cuts permanent.

MPR News: Will there be any political implications of last night's vote for members?

Brett Neely: It's always hard to tell but last night at least one Republican operative was on Twitter saying that Republicans should pull their endorsement of John Kline.

The threat of a more conservative primary opponent is something that many Republicans fear.

But since redistricting, Kline's district is much less conservative than it used to be so it is hard to see how effective that threat would be since it could endanger the seat for the GOP.

For the Democrats, this vote likely won't have much in the way of consequences since they all campaigned on raising taxes on the wealthy. If anything, the most liberal Democrats are disappointed that they didn't get more tax revenue and higher tax rates.

MPR News: What happens next?

Brett Neely: Tomorrow the new Congress will get sworn in.

One-term Republican Rep. Chip Cravaack will leave and Democrat Rick Nolan will replace him.

And then this whole cycle of grandstanding and countdown clocks will start right back over because the government has hit the borrowing limit — the debt ceiling — which will have to get raised by February. And a whole bunch of spending bills, including the automatic budget cuts that this most recent deal delayed by two months. will have to be resolved by March.

It will be deja vu all over again.