President Obama signed the fiscal cliff tax deal last night, and you know what that means: Time for the debt ceiling fight! Technically, the government has already reached its $16.4 trillion borrowing limit, and is relying on "extraordinary measures" to get by. By the end of next month, those maneuvers will likely be exhausted. Republicans, still smarting from the cuts-free cliff deal, are eager to use that deadline to initiate a new battle in what the Washington Post terms "Washington's permanent fiscal war." But there's a problem: Obama insists he won't play that game.
"I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up," Obama said Tuesday. Indeed, the cliff debate may have marked the end of all negotiations between Obama and House leadership, the New York Times points out. Instead, he may stick to the blueprint of negotiating with Mitch McConnell and pushing deals through the Senate. McConnell yesterday called on the Senate to introduce debt ceiling legislation early next month, but as part of a "serious effort to reduce Washington's out-of-control spending." Moody's yesterday warned that if Washington didn't do something to "bring about a downward debt trajectory" it would probably join Standard & Poor in downgrading the US' credit rating, the Wall Street Journal reports.