The Hill
2013's top economic stories
By Bernie Becker and Peter Schroeder

Economic issues dominated discussion in Washington for much of the year — from the opening moments of 2013 until lawmakers broke for the holidays.

But as in years past, President Obama and Congress were only able to strike fiscal agreements through escalating brinkmanship, not because of any great “grand bargain” compromise.

Washington suffered through its first government shutdown in 17 years after Republicans tried — and failed — to stop funding for the healthcare law.

Late in the year, Republicans and Democrats actually came together on a limited budget agreement with days to spare — a positive sign that both sides hoped would carry over into 2014, when fiscal issues are again likely to take center stage.

With that, here are the five biggest economic stories of 2013.

1) The fiscal cliff

True enough: Most of the battle over the so-called “fiscal cliff” occurred in late 2012, as Democrats and Republicans worked to head off the tax increases and spending cuts that economists warned would threaten an already sluggish economic recovery.

But the deal that Obama signed on Jan. 2 — and the bitter taste it left in Republicans’ mouths — brought an even more toxic atmosphere to Washington, and affected fiscal negotiations for the rest of the year.

Holding all the leverage, Democrats scored long sought-after tax rate increases on the wealthiest, and delayed automatic spending cuts known as sequestration for two months.

But Obama and the Democrats also misjudged what the fiscal cliff deal meant, thinking it set a precedent that would allow them to score new tax revenue in future budget deals.

Republicans saw it differently, holding the line against any future attempts to raise taxes, especially when it came to negotiations to roll back the cuts from sequestration.

2) The shutdown

Democrats and Republicans had narrowly averted shutting the lights on the government several times since the GOP won the House in 2010.

Until October, that is.

That’s when the government closed for 16 days, as Republicans tried to take a final stand against Obama’s healthcare law.

Dozens of firebrands in the House and Tea Party favorites like Sens. Ted Cruz (Texas) and Mike Lee (Utah) pushed the hardest for the confrontation, eventually forcing the hand of GOP leaders.

Republicans like Sen. John McCain (R-Ariz.) decried the tactics, saying their “wacko bird” GOP colleagues had gotten into a fight where they had no path to victory. With a debt-limit deadline also looming, Republicans eventually backed down and reopened the government, gaining little in the way of concessions.

For Democrats, the shutdown victory likely was the political high point of the year. But it was also short-lived: The shutdown only temporarily obscured the problems with the ObamaCare rollout that started Oct. 1.

3) The budget deal

The October shutdown paved the way for December’s narrow budget deal that was struck by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.).

Ryan and Murray agreed to turn off billions of dollars in sequester spending, using offsets like increased airline fees, reduced military pensions and Medicare cuts years down the line.

The deal easily passed the House before clearing the Senate by a closer margin…

Read the rest of the story at The Hill