The debt limit will be the first in a series of fiscal negotiations in the new year between the Obama administration and Republicans, who have a majority in the House of Representatives, over the budget and spending.
While Obama has vowed he won’t bargain with the debt ceiling, Republicans such as Senate minority leader Mitch McConnell have said they want to link it to spending cuts.
Markets rallied last week after negotiations between the White House and congressional Republicans led to passage of a law raising income-tax rates to 39.6 percent for couples with annual income above $450,000 while extending tax cuts for lower incomes. The Standard & Poor’s 500 Index dropped 0.3 percent to 1,461.89 at 4 p.m. yesterday in New York before the start of earnings season.
Spending Cuts
The deal on taxes delayed until March 1 automatic budget cuts, setting up another hurdle to be negotiated.
While Lew did not directly negotiate with Congress on the eleventh-hour budget deal, which averted more than $600 billion in tax increases and spending cuts, he helped supervise the White House strategy and briefed Wall Street executives on the talks.
As a former aide to the late House Speaker Tip O’Neill, a Massachusetts Democrat, and a two-time director of the Office of Management and Budget, Lew, 57, has experience on both ends of Pennsylvania Avenue. He’s spent most of his career in government, with a brief detour to Wall Street, where he worked as a managing director for Citigroup from July 2006 until the end of 2008.
Cabinet Selections
After selecting former Senator Chuck Hagel as defense secretary and counterterrorism adviser John Brennan as CIA director yesterday, Obama will turn his attention to filling out the rest of his second-term cabinet. On Dec. 21, Obama announced his choice of Senator John Kerry, a Massachusetts Democrat, as secretary of state, replacing Hillary Clinton.
The nominations for those positions as well as Treasury secretary are subject to Senate confirmation.