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U.S. debt crisis: Finally, we have a deal

08-01-2011 09:15 BJT

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US president Barack Obama announced on Monday that Democrats and Republican leaders have reached an agreement to reduce the US deficit and avoid default. Obama said the agreement will cut about 1 trillion over 10 years.

A bipartisan plan to raise the debt ceiling will be presented to Democrats and Republicans on Monday. Senate Majority Leader Harry Reid said on Sunday, "Leaders from both parties and in both chambers will present this agreement to our caucuses tomorrow,"

Reid said, "To pass this settlement, we'll need the support of Democrats and Republicans in both the House and Senate. There is no way either party, in either chamber, can do this alone."

President Barack Obama said on Sunday that spending cuts included in deal to raise the debt ceiling will not happen so quickly that they will drag on the fragile U.S. economy. In a brief statement, Obama said he would make a detailed case over the next few months for a blanched approach to deficit reduction.

U.S. President Barack Obama stands at the lectern to deliver remarks on the debt ceiling crisis in the briefing room at the White House in Washington July 31, 2011. Obama said on Sunday that Democrat and Republican leaders have reached an agreement to reduce the U.S. deficit and avoid default, but it was not clear if the spending cuts were deep enough to stave off a credit rating downgrade. (Xinhua/Reuters Photo)

Obama said, "Is this the deal I would have preferred? No. I believe we could have made the tough choices required on entitlement reform and tax reform right now, rather than through a special congressional committee process."

By a vote of 50 to 49, Senate Majority Leader Harry Reid's plan fell short of the 60 votes needed to advance in the 100-member body. The outcome of the symbolic test vote in an unusual Sunday session did not affect the broader ongoing effort of both parties, including the White House, to come up with a compromise. Several top US lawmakers showed cautious optimism Sunday that a bipartisan deal to raise the nation's borrowing capacity is within reach.

Mitch Mcconnell, US senate minority leader said, "Well, I'm sure there will be both Democrats and Republicans who, in the end, find the agreement wanting in one way or another. But I believe there will be a strong bipartisan support for this. Again, this deal has not been finalised yet, but I think we are very, very close to something that I could comfortably recommend to my members, and I believe the Democratic leadership will be doing the same."

But the White House cautioned that the details of an agreement still had not been sorted. David Plouffe, senior White House advisor, said, "We don't have a deal. The hours are ticking here. I think what's clear here is that there is general agreement that we're going to have deficit reduction in two stages."

Finally we have a deal. Congressional leaders have reached an agreement on raising the US debt limit, President Barack Obama has announced. The deal will cut about $US1 trillion in spending over 10 years, the president announced.

The two-stage deal, negotiated late Saturday night, would raise the nation's debt limit by about 2.4 trillion US Dollars and spending would be cut by a slightly larger amount.

The first stage - about 1 trillion US Dollars - would take place immediately and the second stage would come later in the year. Without a compromise in place by Tuesday, administration officials say the Treasury will run out of funds to pay all the nation's bills.

The subsequent default could prove catastrophic for the US economy by causing interest rates to rise, and financial markets to sink, sending shock waves around the world.

 

Editor:Zhang Dan |Source: CNTV.CN

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