SALON

Wednesday, Jan 2, 2013 6:30 PM UTC

THE RESET: More fiscal battles loom despite deal

By , Associated Press

Topics: From the Wires,

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 on 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.

In any event, it means Obama can count on further rancorous fiscal battles between the parties soon after he’s inaugurated for a second term.

So much for “And a Happy New Year.”

___

Follow Tom Raum on Twitter: http://www.twitter.com/tomraum

Continue Reading Close

More By Tom Raum.

Next Article

Related Stories

Featured Slide Shows

What To Read Awards: Top 10 Books of 2012 slide show

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 10
  • 10. "The Guardians" by Sarah Manguso: "Though Sarah Manguso’s 'The Guardians' is specifically about losing a dear friend to suicide, she pries open her intelligent heart to describe our strange, sad modern lives. I think about the small resonating moments of Manguso’s narrative every day." -- M. Rebekah Otto, The Rumpus

  • 9. "Beautiful Ruins" by Jess Walter: "'Beautiful Ruins' leads my list because it's set on the coast of Italy in 1962 and Richard Burton makes an entirely convincing cameo appearance. What more could you want?" -- Maureen Corrigan, NPR's "Fresh Air"

  • 8. "Arcadia" by Lauren Groff: "'Arcadia' captures our painful nostalgia for an idyllic past we never really had." -- Ron Charles, Washington Post

  • 7. "Gone Girl" by Gillian Flynn: "When a young wife disappears on the morning of her fifth wedding anniversary, her husband becomes the automatic suspect in this compulsively readable thriller, which is as rich with sardonic humor and social satire as it is unexpected plot twists." -- Marjorie Kehe, Christian Science Monitor

  • 6. "How Should a Person Be" by Sheila Heti: "There was a reason this book was so talked about, and it’s because Heti has tapped into something great." -- Jason Diamond, Vol. 1 Brooklyn

  • 4. TIE "NW" by Zadie Smith and "Far From the Tree" by Andrew Solomon: "Zadie Smith’s 'NW' is going to enter the canon for the sheer audacity of the book’s project." -- Roxane Gay, New York Times "'Far From the Tree' by Andrew Solomon is, to my mind, a life-changing book, one that's capable of overturning long-standing ideas of identity, family and love." -- Laura Miller, Salon

  • 3. "Billy Lynn's Long Halftime Walk" by Ben Fountain: "'Billy Lynn's Long Halftime Walk' says a lot about where we are today," says Marjorie Kehe of the Christian Science Monitor. "Pretty much the whole point of that novel," adds Time's Lev Grossman.

  • 2. "Bring Up the Bodies" by Hilary Mantel: "Even more accomplished than the preceding novel in this sequence, 'Wolf Hall,' Mantel's new installment in the fictionalized life of Thomas Cromwell -- master secretary and chief fixer to Henry VIII -- is a high-wire act, a feat of novelistic derring-do." -- Laura Miller, Salon

  • 1. "Behind the Beautiful Forevers" by Katherine Boo: "Like the most remarkable literary nonfiction, it reads with the bite of a novel and opens up a corner of the world that most of us know absolutely nothing about. It stuck with me all year." -- Eric Banks, president of the National Book Critics Circle

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 10

Related Videos

More Related Stories

Comments

 0 Comments

Comment Preview

Your name will appear as username ( profile | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

From Around the Web

Recommendations