Tuesday, August 02, 2011
THE US House of Representatives voted 269-161 last night to keep the government from defaulting on its debts.
The measure also sets a course for reducing the US government deficit in the future and is a major boost for the administration of President Barack Obama.
The Senate, where support is stronger, is expected to take up the bill today, the deadline for Congress to act before the government loses its ability to pay all its bills.
The vote in the House came after Republican leaders spent the day urgingrecalcitrant conservatives to support the bill.
The bill would raise the debt ceiling by more than $2 trillion (€1.4tn) and cut government spending by a similar amount over the next decade. A special congressional committee would be set up to consider entitlement and tax changes.
Earlier, moving with unusual speed, Republican leaders ordered debate to begin on the House floor at mid-afternoon. That followed public pledges of support from some first-termers and veteran defence hawks — two areas of concern with the agreement.
Rep. C.W. Young, chairman of the committee that handles the defence budget, said: "We’re confident that we can make this happen without affecting readiness and without affecting any of our soldiers."
There were Republican critics, as well, but they were harder to find than last week when they derailed an earlier bill Boehner brought to the floor.
"I’m looking for a reason to vote yes," said Rep. Louie Gohmert of Texas, shortly before debate began. "I haven’t found it, and I’ve been looking since 2am."
After months of wrangling over a deal, there was little time left for lawmakers to decide.
Without legislation in place by the end of today, the Treasury would have run out of cash needed to pay its bills. Administration officials said a default would have ensued that would severely damage the economy.
Beyond merely avoiding disaster, President Obama and congressional leaders had hoped their extraordinary accord would reassure investors at home and around the world he growth in its soaring debt.
Meanwhile, Russian prime minister Vladimir Putin accused the US of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.
"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told a Kremlin youth group.
The final legislation reflected the priorities of the two political parties. It will immediately increase the debt limit by $400bn, with another $500bn envisioned unless Congress blocks it. At the same time, it would cut more than $900bn over 10 years from the day-to-day operating budgets of Cabinet agencies.
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