The next debt ceiling battle means spending cuts, higher taxes, downgrade or all three

Congress and the White House may have averted the so-called “fiscal cliff,” but a familiar financial challenge is coming up that could mean higher taxes and reduced government programs.

Government officials are expected to tussle soon over the nation’s debt limit.

One expert says that, regardless of the outcome of the debt ceiling debate, taxpayers can expect higher taxes, a decrease in government programs or a combination of the two.

“If the goal is to bring down the size of the national debt, then either we have to raise revenue from taxes or stop spending money in large amounts compared to what we do now,” said Kerk Phillips, associate professor of economics at Brigham Young University.

Phillips said that the ceiling must be raised because the alternative, which is defaulting on the debt, is “unthinkable.”

However, the battle isn’t going to be an easy one.

Republican leaders, like House Speaker John Boehner, are vowing to block any agreement on the debt limit that doesn’t include spending cuts, according to a recent article from the Associated Press.

"Now the focus turns to spending," Boehner told the Associated Press.

Boehner also promised that future budget battles will center on "significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt."

The government can’t continue raising the debt ceiling, which is an unsustainable path and must either raise taxes, cut spending or both in order to get the budget deficit under control, Phillips said.

It’s not a matter of “if” but when and by how much, Phillips added.

Fitch, a credit rating agency similar to Standard & Poor’s, has threatened to drop the country’s AAA credit rating if officials don’t address the upcoming ceiling, according to the LA Times.

"The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S.," Fitch, one of the three major credit rating companies, told the Times.

EMAIL: jferguson@desnews.com, Twitter: @joeyferguson