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'Fiscal cliff' deal: After rush of relief, debt ceiling clash already looms

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It also delayed implementation of the sequester – $110 billion in automatic spending cuts set to begin Jan. 2 – a key GOP demand in exchange for agreeing to increase the debt limit up to $16.4 trillion in August 2011.

Now, Congress faces another standoff with the White House on taxes, spending, and entitlement reform as early as February, when lawmakers take up a new White House request to raise the debt limit.

In a statement after the fiscal cliff vote on Tuesday, Mr. Obama said he will refuse to engage the Congress over this issue, period.

“While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed,” he said.

“Let me repeat: We can't not pay bills that we've already incurred.  If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic – far worse than the impact of a fiscal cliff,” he added.

In fact, the national spending ran up against the debt ceiling on Dec. 31, but the Treasury has emergency measures to delay an actual breach for several weeks.

House Republicans are already shifting their focus from no tax hikes to spending cuts as their main concern.

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