President Barack Obama waves as he gets off Air Force One upon his arrival at Joint Base Pearl Harbor-Hickam, Honolulu, Hawaii, Wednesday, Jan. 2, 2013. The president is back in Hawaii for vacation after a tense, end-of-the-new-year standoff with Congress over the fiscal cliff. (AP Photo/Carolyn Kaster)
President Barack Obama waves as he gets off Air Force One upon his arrival at Joint Base Pearl Harbor-Hickam, Honolulu, Hawaii, Wednesday, Jan. 2, 2013. The president is back in Hawaii for vacation after a tense, end-of-the-new-year standoff with Congress over the fiscal cliff. (AP Photo/Carolyn Kaster)
President Barack Obama and Vice President Joe Biden walk away from the podium after Obama made a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in Washington, Tuesday, Jan. 1, 2013. (AP Photo/Charles Dharapak)
House Majority Leader Eric Cantor, R-Va., left, and Speaker of the House John Boehner, R-Ohio, arrive to a second Republican caucus meeting at the U.S. Capitol in Washington, on Tuesday, Jan. 1, 2013. (AP Photo/Jacquelyn Martin)
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."
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