Debt-limit bill passes; on its way to Obama

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(AP) - The Senate emphatically passed emergency legislation Tuesday to avoid a first-ever government default,rushing the legislation to President Barack Obama for his signaturejust hours before the deadline. The vote was 74-26. Obama signed the bill little more than an hour later. Tuesday's vote capped an extraordinarily difficult Washingtonbattle pitting tea party Republican forces in the House againstObama and Democrats controlling the Senate. The resultingcompromise paired an essential increase in the government'sborrowing cap with promises of more than $2 trillion of budget cutsover the next decade. "It's an important first step to ensuring that as a nation welive within our means," Obama said after the vote. "This is,however, just the first step. This compromise requires that bothparties work together on a larger plan to cut the deficit." Much of the measure, which the House passed Monday night, wasnegotiated on terms set by House Speaker John Boehner, including ademand that any increase in the nation's borrowing cap be matchedby spending cuts. But the legislation also meets demands made byObama, including debt-limit increases large enough to keep thegovernment funded into 2013 and curbs on growth of the Pentagonbudget. "We've had to settle for less than we wanted, but what we'veachieved is in no way insignificant," said Senate GOP leader MitchMcConnell of Kentucky. "But I think it was the view of those in myparty that we'd try to get as much spending cuts as we could from agovernment we didn't control. And that's what we've done with thisbipartisan agreement." Many supporters of the legislation lamented what they saw asflaws and the intense partisanship from which it was forged. In theend, it was a lowest-common-denominators approach that puts offtough decisions on tax increases and cuts to entitlement programslike Medicare. "What troubles me about it is that the bipartisan compromisealso represents a kind of bipartisan agreement by each party toyield to the other party's most politically and ideologicallysensitive priority," said Joseph Lieberman, I-Conn. "In the caseof Democrats, it's to protect entitlement spending. ... In the caseof Republicans, it's to not raise taxes." The measure would provide an immediate $400 billion increase inthe $14.3 trillion U.S. borrowing cap, with $500 billion moreassured this fall. That $900 billion would be matched by cuts toagency budgets over the next 10 years. The Senate vote was never in doubt after Majority Leader HarryReid, D-Nev., and McConnell signed on. But like Monday's Housevote, defections came from liberal Democrats unhappy that Obamagave too much ground in the talks, as well as from conservativeRepublicans who said the measure would barely dent deficits thatrequire the government to borrow more than 40 cents of every dollarit spends. "This is a time for us to make tough choices as compared tokick the can down the road one more time," said freshman GOP Sen.Jerry Moran of Kansas. The measure sets up a fall drama that promises to again test theability of Obama and Republicans to work cooperatively. Itestablishes a special bipartisan committee to draft legislation tofind up to $1.5 trillion more in deficit cuts for a vote later thisyear. They're likely to come from such programs as federalretirement benefits, farm subsidies, Medicare and Medicaid. Thesavings would be matched by a further increase in the borrowingcap. There's no guarantee the committee, to be evenly split betweenthe warring parties, will agree on such legislation. But there arepowerful incentives to do so because more budget gridlock wouldtrigger a crippling round of automatic cuts across much of thebudget, including Pentagon coffers. And questions linger about the effect the grueling politicalfree-for-all will have on the U.S. credit rating. Treasury Secretary Timothy Geithner told ABC News that he didn'tknow whether the debt-limit fight would cause America's AAA creditrating to be downgraded. "It's not my judgment to make," he said.Geithner also said he fears world confidence in the United Stateswas damaged by "this spectacle." Enactment of the measure provides welcome closure for Obama, whohas seen his poll numbers sag during the debt-limit battle. GOP presidential candidates such as Mitt Romney and MicheleBachmann issued statements opposing the legislation. "As with any compromise, the outcome is far from satisfying,"Obama conceded in a video his re-election campaign sent to millionsof Democrats. In a tweet, the president was more positive: "The debtagreement makes a significant down payment to reduce the deficit -finding savings in both defense and domestic spending."

U.S. House votes to raise debt limit, cut spending

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