Another standoff over an increase in the debt limit next year could wreak havoc on stock markets and strip away any economic certainty gained from a deficit-reduction deal, economists and business groups say.
But after last year's calamitous battle led to a downgrade of the nation's credit rating, economists and business leaders are imploring Congress to avoid a repeat performance, as lawmakers negotiate over expiring tax provisions and scheduled spending cuts.
Speaker John Boehner struck a fiery tone this week saying the debt limit should provide a measure of fiscal responsibility by matching any raise in the debt ceiling with an equal amount of spending cuts.
"And the fact is that the debt limit ought to be used to bring fiscal sanity to Washington, D.C.," he said.
He argued against any tax increases saying, "I’ve made it clear that I think that’s unacceptable, but until we get this issue resolved, that risk remains.”
Meanwhile, economists and business groups are pressing lawmakers to tackle the debt limit and, possibly add it to any year-end fiscal package, to ensure the country can pay its bills.
"It is critical that lawmakers address the debt ceiling in tandem with the fiscal cliff," said Moody's Analytics economist Mark Zandi.
Zandi argued recently that the debt limit should be replaced with other budget rules to avoid the persistent threat to the economy.
"Simply scaling back the cliff and extending the political brinksmanship over the debt ceiling would doom the economy to at best continued slow growth and possibly another recession if policymakers take it down to the wire as they did in summer 2011," he told The Hill.
But the predicament offers the prospect of a deal that includes a solution.
"Given this dark possibility, I expect lawmakers to nail down both issues at the same time, if not by the end of the year, then by inauguration day," Zandi said.
In his proposal, Obama is pushing to largely erase Congress's control over the debt limit.
His suggestion, roundly rejected by congressional Republicans, would give the White House more power to raise the ceiling as needed, leaving Congress to disapprove.
The argument is that the policy would take any risk of meeting obligations off the table.
A recent analysis showed that the nearly $16.4 trillion borrowing capacity could be reached by the end of the year and would have to be raised in February.
Some say Republicans are playing with a live hand grenade that won't provide them with any of the perceived leverage they got from holding out in last year's talks.
"When it blows up it will be on them," said Michael Ettlinger, vice president for economic policy at the Center for American Progress.
Pressing the issue to the brink "will be destructive to the economy."
Earlier this month, President Obama said he wouldn't negotiate with Republicans like he did in 2011 and wanted to stop the use of the debt limit as a bargaining chip.
Business groups such as the U.S. Chamber of Commerce think another bruising fight over the debt limit will hurt market confidence, and prolong uncertainty for businesses as they make decisions about hiring and investment into the next year, which are already being affected by talks over the "fiscal cliff."
But they add that there needs to be a long-term solution to deficit and debt issues that pose their own problems for the health of the economy.
Dorothy Coleman, vice president of tax and domestic economic policy at the National Association of Manufacturers, told The Hill that the debt limit should be increased in a timely fashion as the nation makes the "tough decisions" necessary to overhaul entitlements and the tax code and "get our financial house in order."
“No one can dispute that our nation’s entitlement programs are unsustainable, and it is mathematically impossible to fix our spending problem without serious entitlement reform," the Chamber’s Executive Vice President for Government Affairs Bruce Josten said recently.
"We are one big deal away from putting the U.S. back on a path to growth and fiscal balance,” he said.