Debt-Ceiling Deal: President Obama Signs Bill as Next Fight Looms

VIDEO: Compromise assigns Super Committee the task of reducing national deficit.
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Hours before the U.S. faced a first-ever default, President Obama signed into law a compromise deal that averts a crisis by raising the debt limit, but signaled that he will not abandon his stalled efforts to raise taxes on the wealthy.

"It's an important first step to ensuring that as a nation we live within our means, yet it also allows us to keep making key investments in things like education and research that lead to new jobs and assures that we're not cutting too abruptly while the economy's still fragile," Obama said in a statement from the White House Rose Garden before signing the bill.

Moments before his remarks, senators voted 74 to 26 to pass the Budget Control Act, the last hurdle for the controversial measure that was first approved by the House Monday night, making a $2.4 trillion down-payment on the federal deficit over the next 10 years.

Obama's signature ends a bruising Washington-made crisis that has gripped the country and lifts what the administration has called a "cloud of uncertainty hanging over the economy."

"The uncertainty surrounding the raising of the debt ceiling for both businesses and consumers has been unsettling," Obama said, "and just one more impediment to the full recovery that we need, and it was something we could have avoided entirely."

But the 2011 fight over the debt and deficit is only half over, and plenty of economic uncertainty abounds.

Congress and the administration still need to agree on $1.5 trillion more in budget savings by the end of the year, a likely battle that will feature many of the same ideological and philosophical tensions that have defined the debate of the past few months.

Will there be additional spending cuts, and from where? Will the parties agree on closing corporate tax loopholes, eliminating deductions or revising income tax rates?

What about changes to federal entitlement programs, such as Social Security, Medicare and Medicaid? Will they be in play?

A special bipartisan "super committee" of 12 lawmakers is tasked with considering those questions and making recommendations that will later be put before their peers in the House and Senate for a vote by December.

If they don't succeed, the new law would impose steep, automatic cuts across the federal budget, including defense programs and Medicare. Lawmakers also must consider whether to extend a payroll tax cut and unemployment insurance benefits.

As members of Congress prepare to leave town for the August recess, Obama reiterated his position on the debate that will resume when they return this fall.

"I've said it before, I'll say it again," Obama said. "We can't balance the budget on the backs of the very people who have borne the brunt of this recession. Everyone has to chip in. It's only fair. That's the principle I'll be fighting for in the next phase."

How the process plays out next is anybody's guess given the course of the tense negotiations in the past few months and the persistent partisan atmosphere inside the Beltway.

But leaders on both sides of the aisle today claimed victory for their constituencies in the latest debt compromise.

Senate Minority Leader Mitch McConnell, R-Ky., called the debt-ceiling debate a template for all future debt-ceiling hikes and declared that conservative Tea Party members have succeeded at pushing their agenda.

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