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The Senate approves a debt deal bill, finally passing a deficit-cutting package Tuesday, just hours before the Treasury’s authority to borrow funds ran out.
By a margin of 74 to 26, the Senate voted to lift the government’s $14.3 trillion debt ceiling enough to last beyond the November 2012 elections.
At the White House, President Barack Obama praised the agreement.
“Congress has now approved a compromise to raise the deficit and avert a default that would have devastated our economy. It was a long and contentious debate and I want to thank the American people for keeping up the pressure on their elected officials to put politics aside and work together for the good of the country.”
The plan calls for $2.1 trillion in spending cuts spread over 10 years and creates a congressional committee to recommend a deficit-reduction package by late November.
Obama signaled that package will include more than spending cuts.
“And since you can’t close the deficit with just spending cuts we will need a balanced approach, where everything is on the table. Yes, that means making some adjustments to protect healthcare programs like Medicare so they are there for future generations. It also means reforming our tax code so that the wealthiest Americans and biggest corporations pay their fair share. And it means getting rid of taxpayer subsidies to oil and gas companies and tax loopholes that help billionaires pay a lower tax rate than teachers and nurses.”
But while a default may have been averted, the economic challenges of slow growth and high unemployment remain.
Bottom line: President Barack Obama praised the debt deal but said when lawmakers consider future steps it will take more than spending cuts to help the economy.