Debt deal: President Barack Obama signs debt bill
Updated: August 2, 2011 - 11:29 pm
Even before the president signed the legislation, he and Republicans were maneuvering for political position on the next stage.
"We can't balance the budget on the backs of people who have borne the biggest brunt of this recession," the president said, renewing his call for higher taxes on the wealthy. "Everyone is going to have to chip in. It's only fair."
Senate Republicans say it will not happen. "I'm comfortable we aren't going to raise taxes coming out of this joint committee," McConnell said in an interview with Fox on Monday.
In a speech shortly before the vote, he predicted instead a renewal of the most recent struggle over spending cuts.
The debt limit will have to be raised shortly after the 2012 election, he said, predicting that no president of either party will be "allowed to raise the debt ceiling without ... having to engage in the kind of debate we've just been through."
He conceded that Republicans got only part of what they wanted in the deal, and he pointed to next year's elections with control of the White House and Congress at stake as a chance to gain greater clout.
"Republicans only control one half of one third of the federal government, but the American people agree with us," he said.
Senate Majority Leader Harry Reid, D-Nev., said the period immediately ahead "is going to be painful," particularly if Republicans insist they will not raise any taxes.
The immediate impact is to raise the debt limit by $400 billion, giving the Treasury what it needs to avoid exceeding the current $14.3 trillion cap. An additional $500 billion increase will be available, subject to disapproval by Congress.
In exchange, spending is to be cut by $917 billion over a decade from Cabinet-level agencies and the thousands of federal programs they administer.
The bill's second phase begins with the creation of the special committee of lawmakers. Depending on its success in recommending savings that Congress ratifies by Christmas, the nation's borrowing authority will rise by $2.1 trillion or as much as $2.5 trillion.
Either way, it is estimated to be enough to avoid a rerun of the current crisis before the 2012 elections.
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