Wednesday, August 3, 2011
© Copyright 2014
Gwinnett Daily Post
President Barack Obama speaks in Rose Garden of the White House in Washington, Tuesday, after the Senate passed the debt ceiling legislation.
WASHINGTON -- With scant time to spare, President Barack Obama signed legislation Tuesday to avoid an unprecedented national default that he said would have devastated the U.S. economy. But the truce with Republicans that defused the crisis seemed to be fading already.
Wall Street crumpled, dismayed by reports of new economic weakness and unimpressed by Congress' prescription. The Dow Jones industrial average sank by 266 points, its eighth straight losing session, and biggest.
The compromise deal to persuade GOP lawmakers to raise the federal debt limit -- U.S. borrowing was to collide with it at midnight -- will cut federal spending by $2.1 trillion or more over the next decade. But Obama immediately challenged Republicans to accept higher taxes on the wealthy in a second round of deficit cuts this fall. They adamantly refused to accept that idea during the past months' dispute.
A stern-faced Obama said at the White House that action to raise the debt limit had been essential but more -- and different -- steps were badly needed.
''We've got to do everything in our power to grow this economy and put America back to work,'' the president said, arguing forcefully for including revenue increases as well as spending cuts in the next round of efforts to trim huge government deficits.
It was the same call the GOP successfully resisted in the bill just approved, and there was little evidence of a change in position.
''The American people agreed with us on the nature of the problem. They know the government didn't accumulate $14.3 trillion in debt because it didn't tax enough,'' said the party's leader in the Senate, Mitch McConnell of Kentucky.