House Passes US Debt Deal

Posted August 1st, 2011 at 10:20 pm (UTC-5)
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The U.S. House of Representatives has approved a compromise deal to raise the country’s debt limit and cut spending, one day before the government is due to start defaulting on its debt.

In a vote Monday night, 269 House members approved the deal and 161 opposed it.

The bill allows the United States to keep borrowing money to pay its bills while cutting about $1 trillion in spending over the next 10 years.

It had just lukewarm support overall. Some conservatives say it does not cut enough spending, and liberals complain the cuts are too deep and that the bill does not raise taxes on the rich.

But nearly all lawmakers say the package is better than the United States defaulting on its debt. The U.S. Senate plans to vote on the bill Tuesday, and both party leaders say they expect it to pass. It then will go to President Barack Obama for his signature.

The package is a compromise between Democrats, Republicans and the White House. It comes after months of political bickering and stalemate that pushed Washington to the edge of default on its massive debt.

Along with cutting spending, Mr. Obama says the deal sets up a bipartisan panel in Congress to consider up to $1.5 trillion in further cuts. He says everything will be on the table, including tax increases and cuts to social welfare programs like Medicare. If the panel fails to reach agreement, then the deal requires automatic spending cuts.

The president called the proposal a compromise that lets the country avoid default, while making a serious down payment on deficit reduction. He said default would have a “devastating effect” on the U.S. economy.

The White House says the agreement would avoid the need for another vote on raising the debt limit until 2013, providing greater “certainty” about the fragile economy. It also would delay the issue until after the next U.S. presidential and congressional elections.