US debt: Deal set to be agreed

2nd August 2011

The Financial Times (paywall) reported the deal, which would cut spending by $2,400bn over 10 years and increase the debt ceiling until 2013, was due for a final vote in the Senate (the other house making up the US Congress) on Tuesday, where it was also expected to pass with a strong majority.

Barack Obama, the US president, could enact the legislation ahead of the today’s midnight deadline to avoid a default.

The Guardian reports that Democrats and Republicans "reluctantly joined forces" to see the bill throught the Republican-dominated house.

"With so much at stake, the Democrats and Republicans called in all members. In an emotional moment, even the Democrat Gabrielle Giffords returned to vote for the first time since being shot in the head in Tucson, Arizona, in January."

"She received a standing ovation from both sides of the House."

Guardian reporter Ewen MacAskill writes that the Senate is scheduled to vote on the bill at noon "but that is largely a formality, because the Democrats have a majority and the Republican leadership has promised support." The Republican leader in the Senate, Mitch McConnell, said there were enough votes in the Senate to pass the bill.

Voice of America website sums up politicial sentiment that the deal was largely a compromise by quoting one Congress member.

Representative Hoyer: "I am voting for this bill – not because I like this bill, although it does do some things that I think need to be done," said Hoyer. "We need to bring down the [budget] deficit; we need to address the [national] debt; we need to return to fiscal responsibility.  But default for the United States of America is not an option."  

More: Are US corporate bonds a better bet than Treasuries

US debt: Obama announces deal, but Congress still needs to vote

Why the U.S. won’t default on its debt

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