Obama says deal reached to end debt impasse

Last-minute agreement reached; White House says $2.5 trillion to be cut from deficit over next 10 years; support for deal uncertain in House.

Obama making speech about Afghanistan 311 (photo credit: REUTERS/Pablo Martinez Monsivais/Pool)
Obama making speech about Afghanistan 311
(photo credit: REUTERS/Pablo Martinez Monsivais/Pool)
WASHINGTON - President Barack Obama on Sunday announced a last-minute deal to raise the US borrowing limit and urged lawmakers to "do the right thing" and approve the proposed agreement to avert a catastrophic default.
Laying out the endgame in the crisis just two days before a deadline to lift the US debt ceiling, the White House and both Republican and Democratic leaders in Congress said the compromise would cut about $2.4 trillion from the deficit over the next 10 years.
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Now that top lawmakers have sealed a deal, both the Senate and House of Representatives are expected to vote on Monday and in principle a bill could be on Obama's desk by nightfall. While Senate approval is likely, the agreement's fate may be less certain in the House.
After weeks of acrimonious impasse and with the final outcome hinging on support from recalcitrant lawmakers, Obama pressured both sides to carry to fruition the accord hammered out behind closed doors.
"The leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default, a default that would have had a devastating effect on our economy," Obama told reporters at the White House.
"I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days," Obama said.
The plan , which buoyed jittery global financial markets, involved a two-step process for reducing the US deficit. The first phase calls for about $900 billion in spending cuts over the next decade and the next $1.5 trillion in savings must be found by a special congressional committee. Congress must act by Dec. 23, 2011, under the deal.
Republicans had insisted on deep spending cuts before they would consider raising the $14.3 trillion limit on US borrowing, turning a normally routine legislative matter into a dangerous game of brinkmanship.