US Congress Set to Vote On Debt Issue

Posted July 28th, 2011 at 4:35 pm (UTC-5)
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The U.S. House of Representatives is to vote Thursday on a plan by Republican House Speaker John Boehner to raise the debt ceiling and cut spending.

Boehner's plan calls for raising the country's $14.3 trillion borrowing limit, in exchange for billions of dollars in spending cuts.

But Senate Majority Leader Harry Reid said on his Web site the Democratic-majority Senate will defeat Boehner's bill in a vote late Thursday, if it passes the House.

Boehner's plan also has attracted criticism from the ultra-conservative Tea Party faction of the Republican party. Conservatives say it cuts too little spending. Democrats complain it would bring the issue back again before the next election.

Reid advocates a rival plan that he calls a compromise that incorporates many Republican goals. He says it would raise the debt limit, cut spending by $2.5 trillion, and abandon efforts to raise taxes.

White House spokesman Jay Carney says U.S. President Barack Obama is optimistic a compromise can be reached before an August 2 deadline. Carney says a successful compromise would significantly cut spending, set up a way to reform taxes and control spending on social programs, and lift the debt ceiling.

Without a deal on some kind of plan to raise the $14.3 trillion legal limit on borrowing by the deadline, the Treasury Department says it will not have enough money to pay all of its bills. That could bring a default that would likely prompt rating agencies to cut the U.S. credit rating, bringing higher interest rates and hurting economic growth.