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More fiscal battles loom despite deal

Published: Wed, January 2, 2013 @ 3:15 p.m.

Financial markets around the world are celebrating the climactic New Year's agreement to avert scheduled tax increases and budget cuts in the United States.

But the party could be a short one.

While Congress' action ended a stubborn stalemate and prevented the nation from going over a "fiscal cliff" and possibly tumbling back into recession, the terms of the bipartisan pact helped erect an even larger fiscal precipice.

The deal, which President Barack Obama plans to sign quickly, blocked big income tax increases on most Americans. But it extended the deadline for deep mandatory spending cuts for only two months. And it did nothing to deal with raising the nation's borrowing limit, despite Obama's request.

The debt limit, set by Congress, is now $14.3 trillion — a ceiling the government officially hit Monday.

The Treasury Department says it will take "extraordinary measures" to keep paying the government's bills — but only until sometime in February or March.

After a summer 2011 fight over raising the debt limit, the government came close to defaulting for the first time ever and credit-rating agency Standard & Poor's yanked the nation's blue-chip AAA bond rating.

Before returning to Hawaii for vacation, Obama dug in his heels and warned Republicans against using a vote on the debt ceiling to try to win concessions on spending cuts. He asserted he wouldn't negotiate "with Congress over whether or not they should pay the bills they've already racked up through the laws they have passed."

He didn't elaborate, but some Democrats want him to challenge the debt-limit process itself, a move certain to outrage Republicans.


1jmh0724(2 comments)posted 3 years, 4 months ago

Well if the Senate would pass a bill ( which is coming up on four years without one) then Pres Obama could quit using that excuse. I am not in favor of raising it, i would consider it if they would make like 3 dollars of cuts for every 1 they increase it. That way they can start to reduce the national debt

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2NoBS(2647 comments)posted 3 years, 4 months ago

Congress should all quit in shame. They are not worthy of their positions, and certainly not worthy of their bloated paychecks and benefits. How about Congress tasting a little of what Middle Class America has been putting up with? Where are THEIR concessions and givebacks and pay cuts?

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