Republican US Debt Boost Bill Is Passed
12:35am UK, Saturday July 30, 2011
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It comes after President Barack Obama earlier made a fresh appeal to Democrats and Republicans to reach a deal over raising the US debt limit before a deadline on Tuesday.
The legislation, which also contains $917bn in spending cuts over a decade, now goes to the Senate.
Democrats in control of that chamber have vowed to block it in favour of a longer-term $2.5 trillion borrowing limit increase with about $2.2 trillion in spending cuts.
The country will be unable to borrow money to pay its bills if Congress does not concur to increase the maximum level by August 2.
Economists have claimed that defaulting on the debt could push the already fragile American economy back into recession.
Mr Obama has stated “there were plenty of ways out of this mess” but warned “we are nearly out of time”.
He warned the US was in danger of losing its AAA credit rating – and this could mean tax rises in the form of higher interest rates on mortgages and credit cards.
But he was “confident we can solve this problem and will solve this problem”.
He stated any deal must have the support of both the House of Representatives and Senate, adding the “time for compromise was now”.
The leader stated the bill put forward by House of Representatives Speaker John Boehner, a Republican, “does not solve the problem”.
“What’s clear now is that any solution to avoid default must be bipartisan,” he stated at the White House.
Speaker Boehner’s failure to win enough support exposed a rift in the Republican Party that could complicate efforts to reach a compromise to raise the debt ceiling.
Mr Obama stated Senator majority leader Harry Reid, a Democrat, has introduced a plan that contains cuts concurred by both parties.
Senator Mitch McConnell, a Republican, had also “offered a solution that can get us through this”.
The president stated either of their plans could be altered in order to get them passed by both houses, which would grant them to be signed into law.
Sky’s US correspondent Greg Milam said: “Republicans and Democrats appear to be in gridlock in trying to tie spending cuts to the deal to raise the ceiling.
“The Republican leadership in the House of Representatives has spent three days trying to round up enough of its own members to support a plan already doomed to defeat in the Senate.
“It has become deeply humiliating for Speaker John Boehner and has raised questions about his future.
“He has struggled to win over conservative Republicans, many of them elected with Tea Party support, who believe cuts need to be much greater.
“Democrats controlling the Senate have only just started speaking about their own plan, a reticence that has also attracted criticism.
“As President Obama said, the Republicans and Democrats are ‘not miles apart’ over how much they believe needs to be cut from America’s spending, the sticking point is whether to raise the debt ceiling in two steps or one.
“But the American people are increasingly angry at how long this is taking and the possible consequences for them of the damage being done to America’s financial reputation.”
source : news.sky.com
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Submited at Saturday, July 30th, 2011 at 12:00 am on Business by nuterman
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