WASHINGTON— A deal to raise the U.S. debt ceiling and avoid government default was announced by President Barack Obama Sunday night.
The last-minute agreement by House and Senate leaders will go to Congress Monday, with the final stamp of approval being given by Obama. The deal, if approved, will raise the nation’s $14.3 trillion debt ceiling, and prevent the United States from defaulting on its debt this week.
“The first part of this agreement will cut about $1 trillion dollars in spending over the next 10 years,” Obama said in the White House briefing room, according to CBS News.
Programs such as Medicare would likely come under the knife for “modest adjustments,” Obama said. He said wealthier Americans and the biggest corporations might need to give up tax breaks and special deductions.
The second part of the deal will require a bipartisan committee of Congress to report by November with a proposal to further reduce the deficit.
“This process has been messy; it’s taken far too long,” Obama said, adding it is not the deal he would have preferred.
Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement he is pleased a framework has been established “that will ensure significant cuts in Washington spending.”
He said that Republicans will meet Monday morning, “to discuss the framework that the White House and the congressional leaders in both parties think would meet our stated efforts to cut spending more than the president’s requested debt-ceiling increase, prevent a national default, and protect the economy from tax increases.”
House Minority Leader Nancy Pelosi (D-Calif.) said she will be meeting with House Democrats about the compromise measure on Monday.
“We all may not be able to support it or none of us may be able to support it,” Pelosi said, according to AP.
It was a finale to cap off a tumultuous weekend.
Over the weekend, the Senate GOP leadership and the White House engaged in intensive negotiations in a last-ditch effort to form a bipartisan debt-reduction deal—one that could cut as much as $3 trillion from the federal deficit over the next decade—ahead of the Aug. 2 Treasury deadline.
After House Speaker John Boehner’s (R-Ohio) debt-reduction bill narrowly passed the House but got tabled in the Senate on Friday, Senate Majority Leader Harry Reid (D-Nev.) brought up a vote on his own bill, which would have cut federal spending by about $2.2 trillion over the next 10 years and included a debt-ceiling increase that would last through the end of 2012.
On Sunday afternoon, the Senate failed to breach the 60-vote threshold needed to end a filibuster of the bill in a 50-49 vote, and subsequently went into recess, subject to recall by the majority leader. In a separate vote, the Reid plan was also killed in the House.
As the political lives of the Boehner and Reid plans seemed to have met their respective ends, the Senate GOP leadership began intensive negotiations with President Barack Obama and Vice President Joe Biden later in the day.
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