WASHINGTON, Aug 2, (Agencies): US President Barack Obama on Tuesday signed into law a new bill which would raise the nation’s debt ceiling and avoid a default by the world’s top economy, the White House said. Obama signed the bill shortly after it passed the Senate by 74-26 votes, a day after it cleared the House of Representatives by an overwhelming 269-161 margin. White House spokesman Jay Carney told reporters “the president has signed the bill and turned it into law.” Obama urged lawmakers to focus next on boosting the US economy with measures to aid job creation so businesses can once again hang out the “now hiring” sign. “We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession,” Obama told journalists just after Senate passed a deal to raise the nation’s debt ceiling.

“Everyone has to chip in. It’s only fair. That’s the principle I’ll be fighting for during the next phase of this process,” Obama said in a statement in the White House’s Rose Garden. He was speaking just minutes after Senate approved legislation to avert a disastrous debt default and cut trillions in government spending, sending the bill to Obama to sign into law after weeks of bruising in-fighting. Republicans have promised the spending cuts will create jobs, but top Wall Street economists have warned the austerity measures will actually be a drag on already sluggish US growth even as government stimulus measures run out. “In the coming months,” Obama vowed, “I’ll continue also to fight for what the American people care most about. New jobs, higher wages, and faster economic growth.”

Measures
He rolled out a list of measures which he said he hoped US lawmakers would focus on once they return from their recess in September to inject fresh life into the economy with unemployment still hovering around 9.2 percent. Cutting red-tape on patents which has strangled small businesses, giving loans to private companies to repair the nation’s infrastructure, and passing a series of trade deals stalled in Congress were some ways of stimulating the economy, he said. “We have workers who need jobs and a country that needs rebuilding,” he said proposing the idea of creating an infrastructure bank to provide such loans to small businesses.

US lawmakers needed to put the bitter wrangling aside and after their vacation “immediately take some.. bipartisan steps that will make a difference,” Obama said. “Both parties share power in Washington and both parties need to take responsibility for improving this economy,” he insisted. “Voters may have chosen divided government, but they sure didn’t vote for dysfunctional government. They want us to solve problems. They want us to get this economy growing and adding jobs.” He also again stressed the need for tax reform, and called for extending tax cuts for middle class families “so you have more money in your paychecks.”

Obama insisted there needed to be tax reform “so that the wealthiest Americans and biggest corporations pay their fair share.” The president also highlighted the need to eliminate taxpayer subsidies to oil and gas companies and closing tax loopholes — something that his Republican rivals resisted during the protracted, bitter debt deal negotiations. The bill to raise the United States’ borrowing limit and prevent a possible debt default passed in Congress. But it not enough for the US to maintain its coveted AAA debt rating, according to Fitch Ratings. On Tuesday, Fitch said the agreement was an important first step but “not the end of the process.” The rating agency wants to see a credible plan to reduce the budget deficit.

David Riley, managing director at Fitch, told The Associated Press: “There’s more to be done in order to keep the rating in the medium-term.”
Fitch expects to conclude its review of the US sovereign rating by the end of August. As the debt deal currently stands, it is possible the US debt rating could be downgraded at that time, Fitch said.

Downgrade
US Treasury Secretary Timothy Geithner said he is not sure whether the bitterly fought debt agreement will avoid a downgrade of the US top-tier credit rating.
Geithner, in an interview with ABC News aired on Tuesday, also said he thought the risk of the US economy slipping into a double-dip recession was low, but added that the battle over the debt limit and the threat of default had damaged confidence in the economy.
“I don’t think that that risk right now is very significant,” he said of a double-dip recession, in the interview which was recorded on Monday afternoon.

Geithner said the ratings agencies were “going to take a careful look” at whether Washington politicians have the will to act to bring deficits under control.
“It’s not my judgement to make” whether the deal is enough to avoid a downgrade, saying that was up to the ratings agencies.
“You know this is in some ways a judgment on the capacity of Congress to act. And what this deal does is put us in a much better position to make those tough choices because the down payment’s pretty strong and this special committee, this mechanism for the reforms is a much more powerful device than we’ve had in the past.”

The plan approved by the House on Monday would raise the borrowing limit by enough to last into 2013 and creates a congressional committee to recommend a deficit-reduction package by late November.
Ratings agencies are still analyzing the deal, and Standard & Poor’s had said previously that $4 trillion in deficit reduction over a decade would likely allow it to confirm the US AAA rating. The bill passed by the House of Representatives on Monday offers $2.4 trillion in budget savings, so many analysts believe a downgrade to AA from AAA by S&P is still likely. Asked by interviewer George Stephanopoulos whether Congress’ gridlock over the debt limit made a downgrade more likely, Geithner said, “I don’t know. It’s hard to tell.”

“I think this is a good result but a terrible process. And ... I think as the world watched Congress step up to the edge of the abyss, it made them really wonder whether this place can work. But this is a good deal. It’s a good agreement,” he said. Stephanopoulos also asked Geithner whether he would be leaving the Treasury soon after the deficit reduction deal is signed by President Barack Obama. Geithner had previously signaled to White House officials he was considering a possible exit once a debt deal was completed. Geithner said he has not “had a ton of time to think about that.” “I mean, I haven’t made that decision yet,” he added. “And you know, we’ve got a lot of challenges, the president’s got a lot of challenges, and you know, I’ve got other pressures on me, too. But I’ll make that decision at the right moment.”