Obama Gets Deal on US Debt Ceiling
Obama strikes a deal with Republicans to raise the debt ceiling and avoid a US default.
The proposed deal between Republicans and Democrats means that the US debt ceiling could rise by up to $2.4 trillion in return for making the same amount in reductions over a 10 year period.
Voting on the deal will take place today and Congress will have to approve the deal. There are still politicians on both sides that are worlds apart with their views, the Republican Tea Party members don’t believe the cuts go far enough and there are many Democrats opposed if it doesn’t include tax increases. However, party leaders will be confident that it will be approved.
The deadline for acting is tomorrow and President Obama re-iterated the point in his statement that a default would have a devastating effect on the US economy.
The debt ceiling is unusual because it is written into law in order to control Government spending. With the financial battering that the US has taken over the last few years since the banking crisis, they have been exceptional times for the US economy and that ceiling kept on getting closer and closer. For the first time in it’s history the US was in danger of not being able to pay it’s bills.
Stock markets around the world rose on the news that a deal had been struck. Markets had been nervous that the worlds biggest economy would default and start a chain of events that would reverberate around the world.
Photo: Dana Beveridge
Comments