The Senate approved legislation to raise the federal debt limit on a 74-26 vote yesterday, a day after the House easily passed the measure. President Obama immediately signed the bill into law only hours before a midnight deadline. President Obama’s approval ended months of hard fought warfare between the two political parties which consumed the political agenda in Washington. The final deal, which ensures that the federal government will not default on its debt, grants the U.S. Treasury an additional $400 billion in immediate borrowing authority and makes additional funds available at future dates. The package will also cut at least $2.1 trillion in projected borrowing over the next decade and does not contain any tax hikes.

Although a debt ceiling proposal agreed to by the bipartisan Gang of Six in the Senate included a fully paid for 10-year freeze of Medicare physician payment rates, the final legislation does not patch pending cuts in any way. In fact, the agreement could cut payment rates even further. The legislation creates yet another  joint bipartisan committee who will be tasked with cutting as much as $1.5 trillion in additional federal spending  by Thanksgiving. If the panel cannot reach an agreement on the cuts needed to reach their target or congress does not vote to pass the cuts by December 23, the legislation could trigger cuts in certain areas– including a possible 2 percent cut in physician payment rates. This would occur only days before the SGR is scheduled to cut payment rates by 29 percent.