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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 1 year, 6 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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2theoldwrench(230 comments)posted 1 year, 6 months ago

The reps were offered a 10 to 1 offer and they turned it down. They were so conmvined they would win they didn't care about the country!!!!! Also if thr reps would withdraw the nearly 400 filibusters they would also get something done in the senate but then that might make the President look good and we can't that, can we????? I would consider 2 for 1 defense to non defense cuts to reduce the debt.

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3Ianacek(882 comments)posted 1 year, 6 months ago

They have all known there was a deadline for decisions & they failed to make them .

Republicans are generally more trusted on finance , but Obama has stolen a march on them by (1) being united ( not difficult for him ) & (2) appealing directly to the people .

They should never have allowed the tax increases without spending cuts , but Obama divided & ruled .

Congress members of both parties should have been consulting their constituents on spending & cut priorities . Certainly Tim Ryan hasn't . His website only boasts of more spending .

Boehner needs to find a concensus among his team & run the tightest voting discipline seen in many years to ensure they hold the line against pressure . Can he do it ?.

You can bet all the lobbyists cut their vacations this year . Its time for Main Street to tell Congress where to make the cuts .

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