Now that the administration has gone from trying scare tactics over the impact of the sequester cuts to sending reassuring signals that the situation can be managed; and now that the media realizes that the impact of the cuts will be phased in; and now that both parties are signaling that they are going to finesse the next fiscal cliff deadline and avoid a government shutdown – after all that, teasing out the contours of where Washington is headed on taxes and spending isn’t that easy to do.

My hunch is that the next big play is the House budget that Paul Ryan is writing up. He has promised serious deficit reduction on a short time horizon. The choices he makes on Medicare (change the program fundamentally or just look for savings), Social Security (does he take it on at all), defense (how much does he whack at it), and tax loopholes (does he go after significant corporate sacred cows) will tell us a lot about the kinds of political risks House Republicans are willing to take – and what kind of compromises they are willing to make.

There will be similar clues in the White House and Senate budget bids, but I think Ryan’s will tell us the most about where things are headed. If there is stuff in there Gene Sperling likes, we could get back on track for a grand bargain, which remains the only way out.