President Obama is set to make a speech regarding the US Debt Ceiling this evening. The bill has been passed in the US Senate by a vote of 74-26, with a deal agreed on between Republicans, Democrats, and the President, who will pass the bill into law after his speech.
The bill will raise the debt limit by up to $2.4 trillion, or £1.5 trillion more than the current limit of $14.3 trillion. It will then save at least $2.1 trillion over ten years.
This deal came after several months of arguments and debates over the debt ceiling between lawmakers of both parties and the White House. The vote has come in the nick of time, only 12 hours before time would have run out, leaving the US unable to meet its bills according to the US treasury department. Luckily, the deal was reached in time.
Senate Republican leader Mitch McConnell commended the legislation just before the vote, calling the debate extremely important and saying, “”The push-and-pull people saw in Washington this week was not gridlock, it was the will of the people working itself out.
“Together, we have a new way of doing business in Washington.”
After Mr. McConnell spoke, the Senate Majority Leader, Harry Reid, said that the US needed to avoid the disaster that would have occurred had the ceiling not been raised, even though the deal was not perfect. The legislation passed in the House of Representatives Monday evening. It had a striking majority.
The bill raises the debt ceiling into 2013, meaning Obama will not have to face another debate in the middle of next year’s re-election campaign. The deal angers both Republicans on the far right and Democrats on the far left, showing that not everyone can be pleased, but that the compromise is likely to be best for the nation.
Liberals are unhappy with the spending cuts promised by the plan, which does not include tax rises. However Obama could still let the tax cuts for the top brackets, which were put in place under Bush, expire when they are due to do so in January of 2013. Republicans were displeased that more savings were not included in the bill.
Though the deal was not the one Obama had preferred, he recognized the compromise necessary, calling it a “serious down-payment” on the deficit. The deal also creates a committee made up of 12 members from both the House and the Senate, which will put into place up to $1.5 trillion additional deficit cuts over the next ten years.
Had the deal not been reached in time, economists say that markets around the world would have suffered.