President Barack Obama and Congressional Republicans looked ahead on Wednesday toward the next round of even bigger budget fights after reaching a hard-fought “fiscal cliff” deal that narrowly averted potentially devastating tax hikes and spending cuts, Reuters reported.

The agreement, approved late on Tuesday by the Republican-led House of Representatives after a bitter political struggle, was a victory for Obama, who had won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans.

But it set up political showdowns over the next two months on spending cuts and on raising the nation’s limit on borrowing. Republicans, angry the deal did little to curb the federal deficit, promised to use the debt ceiling debate to win deep spending cuts next time.

“Our opportunity here is on the debt ceiling,” Republican Senator Pat Toomey of Pennsylvania said on a US television network, adding Republicans would have the political leverage against Obama in that debate. “We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean.”

Republicans, who acknowledged they had lost the fiscal cliff fight by agreeing to raise taxes on the wealthy without gaining much in return, vowed the next deal would have to include significant cuts in government benefit programs like Medicare and Medicaid health care for retirees and the poor that were the biggest drivers of federal debt.

“This is going to be much uglier to me than the tax issue. This is going to be about entitlement reform,” Republican Senator Bob Corker of Tennessee said on another TV network.

“This is the debate that’s going to be far more serious. Hopefully, now we have this other piece behind us – hopefully – we’ll deal in a real way with the kinds of things our nation needs to face,” he said.

Obama urged “a little less drama” when the Congress and White House next address thorny fiscal issues like the government’s rapidly mounting $16 trillion debt load.

The fiscal cliff showdown had worried businesses and financial markets, and US stocks soared at the opening after lawmakers agreed to the deal.