Washington, Aug 2 (IANS) The US Senate is poised to seal the compromise debt-ceiling deal crafted by President Barack Obama and congressional leaders to avoid a catastrophic US default sending shock waves through the world economy.
The Senate is scheduled to take up the debt-ceiling deal at noon Tuesday just hours before the government runs out of cash to pay its bills at midnight.
Democratic Majority Leader Harry Reid said no amendments will be allowed, and approval of the deal will require a super-majority of 60 votes in the 100-member Senate.
However, the measure which must reach Obama’s desk before the midnight deadline Tuesday is expected to sail through the upper chamber given the margin of the vote in the House Monday and unified support of Senate leaders of both Democratic and Republican parties.
Overcoming opposition from liberal Democrats and Tea Party conservatives for ideologically different reasons, the hastily written 74-page bill was cleared by the House on a 269-161 vote late Monday, with 95 Democrats joining 174 Republicans in support.
The agreement reached Sunday by Obama and congressional leaders from both parties would keep the US out of default and reduce deficits by at least $2.1 trillion over a decade.
Whether the deal might also avert a first-ever credit downgrade for the US is not clear, since ratings agency Standard & Poor’s indicated it was looking for a credible, bipartisan plan that had at least $4 trillion of debt reduction, CNN said.
The plan includes no tax or entitlement reform measures up front, although theoretically it leaves the door open to both, it said.
The framework will raise the debt ceiling immediately by $400 billion, then by another $500 billion after September.
After deep cuts are enacted by the end of the year, it will be increased by another $1.2 trillion to $1.5 trillion. All told, the increases should cover the treasury’s borrowing needs until 2013.
(Arun Kumar can be contacted at arun.kumar@ians.in
