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Lawmakers clash over federal debt ceiling

By Zachary A. Goldfarb, WashPost, Published: January 2

Only hours after Congress adopted a bill to avert the “fiscal cliff” of tax increases and spending cuts, lawmakers on Wednesday began to clash over the limit on federal borrowing, inaugurating the next phase of Washington’s permanent fiscal war.

Republicans said they will press their demand that spending be reduced dramatically in exchange for allowing any more U.S. borrowing. But President Obama and top Democrats insisted that their goal of raising the $16.4 trillion federal debt ceiling is non-negotiable.

The government has reached its debt limit — a statutory cap on borrowing — and has about two months to go before it exhausts “extraordinary measures” being used to fund federal operations. Not raising the debt ceiling probably would prompt a default on U.S. government debt and at least a short-term financial crisis.

Senate Minority Leader Mitch McConnell (R-Ky.) on Wednesday called for the Senate to take the lead and address the debt ceiling by early next month with legislation that would significantly trim spending.

(More here.)