The White House and Congress managed to cut a deal on the “fiscal cliff” by agreeing to a two-month delay to sequestration – automatic spending cuts that were set to take effect on January 1.
Obama and lawmakers now have until March 1 to reach agreement on about $85 billion in spending reductions. If they do not, they will see across-the-board ones kick in, about evenly split between military and domestic programs.
Obama and Congress likely have until the end of February to raise the U.S. debt limit, now at $16.4 trillion.
Failure to do so would result in an unprecedented U.S. default, a move likely to rattle financial markets worldwide.
Obama says he will refuse to allow the debt limit to become a political bargaining tool again.
But Republicans do not seem be willing to raise it without extracting major spending cuts, mostly from government programs such as Social Security and Medicare.
Via – Reuters
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