Strikes deal over debt Bill, Obama

US President Barack Obama has said top lawmakers have reached an agreement to reduce the budgetary deficit and avert a debt default, that would have had a devastating effect on American economy. '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 said in his remarks to the White House press late last night, after the agreement was reached. . 'The first part of this agreement will cut about USD one trillion in spending over the next 10 years -- cuts that both parties had agreed to early on in this process. 'The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President -- but at a level that still allows us to make job-creating investments in things like education and research,' he said. The bipartisan agreement would raise the debt limit and cut spending between USD two trillion and USD three trillion. 'We also made sure that these cuts wouldn't happen so abruptly that they'd be a drag on a fragile economy,' Obama said, noting that this was the best he could get under the current circumstances. 'Is this the deal I would have preferred? No. I believe that we could have made the tough choices required -- on entitlement reform and tax reform -- right now, rather than through a special congressional committee process. 'But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year. Most importantly, it will allow us to avoid default and end the crisis that Washington imposed on the rest of America,' the US President said.

Boehner take cases on debt limit to nation, Obama

President Obama and House Speaker John Boehner faced off in back-to-back addresses to the nation Monday in prime-time, after House Republicans and Senate Democrats emerged with competing plans to address the U.S. debt ceiling. One of the biggest obstacles remaining: the size of the debt limit increase. House Republicans want an increase of $1 trillion — enough to last about six months, with future increases tied to finding more cuts and a House and Senate vote on a balanced budget amendment. The Senate wants $2.4 trillion, enough to get through the 2012 election. "Based on what we've seen these past few weeks, we know what to expect six months from now," Obama said during a prime-time address to the nation, calling on Americans to urge Congress to compromise. STORY: Deadline on debt debate may be later than expected House Speaker John Boehner said he tried to work with Obama, but the president "would not take yes for an answer." "The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today," Boehner said. With a House vote scheduled for Wednesday on the Boehner plan and no timetable in the slower-paced Senate, few days would be left to reconcile the two before the government faces the prospect of default. But there is movement: Both plans take tax hikes off the table, something Democrats had insisted upon as part of a grand deficit-reduction deal. Republicans have also softened their demand to make an increase in the debt limit subject to an immediate vote on a balanced budget amendment. Both sides have settled on an immediate vote on at least $1.2 trillion in spending cuts. They've also agreed there should be a process to propose future cuts, and give them an up-or-down vote. The House Republican plan is a modified version of the bill passed by the House, but rejected by the Senate last week. The vote on a balanced budget amendment would be delayed, and many of the spending cuts would be up to a congressional commission. A number of conservatives said they won't support anything short of the original House position. "Washington wants a deal. Americans want a solution," said Rep. Jim Jordan, R-Ohio. The Senate plan, by Majority Leader Harry Reid, D-Nev., proposes $2.7 trillion in cuts over 10 years, with no reductions in entitlement benefits like Social Security or Medicare. Reid said it also meets two Republican demands: No tax increases and spending cuts at least as large as the debt limit increase. For more details click here >>>

GOP try to figure out way forward on debt, Obama

A day after budget talks collapsed amid acrimony and finger-pointing, President Obama and congressional leaders meet this morning in search of a way to raise the $14.3 trillion debt ceiling while staving off a government default. An angry Obama summoned the leaders Friday night, shortly after House Speaker John Boehner pulled out of month-long budget negotiations with the White House; the president said the Republicans walked away from a deal that would have cut the budget roughly $3 for every $1 in new tax revenue. "We have run out of time," Obama said. "And they are going to have to explain to me how it is that we are going to avoid default." Boehner -- who will be at the White House this morning -- said he broke off talks because Obama insisted on raising taxes as part of a debt ceiling debt, including a last-minute request for $400 billion in new revenues. The speaker said he will now work with Senate leaders on a fallback agreement to raise the debt ceiling and avoid default. "It's not in the best interests of our country to raise taxes during this difficult economy," Boehner said. "I'm confident that the bipartisan leaders here in the Congress can act. If the White House won't get serious, we will." The White House meeting is at 11 a.m. Leaders from both parties said they need to raise the $14.3 trillion by Aug. 2, a week from Tuesday. That's the day the Treasury Department says it loses borrowing authority needed to pay the nation's bills, risking default. The potential effects of a default include higher interest rates on all loans, and a downgrade in the country's credit ratings, government officials have said. There is also the prospect of unamailed government checks ranging from Social Security payments to veterans benefits. As Boehner works with the Senate on a new debt deal, they may well run into the same problem as the Boehner-Obama negotiations: Finding a deal that can pass both the Republican-run House and the Democratic-run Senate. Boehner and other House Republicans say they will only raise the debt ceiling if Democrats agree to debt reduction of the same amount or more, at least some $2.5 trillion over ten years -- without raising taxes. Obama and Democrats said reducing the $14 trillion-plus debt requires new tax revenues, and proposed eliminating tax breaks and loopholes for wealthy Americans such as oil company operators and private plane owners. Democrats also said that proposed Republican budget cuts threaten such programs as Social Security and Medicare. In blasting Boehner and the Republicans, Obama said Democrats were willing to cut $650 billion from Medicare, Medicaid, and Social Security, as well as other reductions that many Democrats had objected to. Overall, the agreement would have budget cuts of up to $3 trillion over ten years, with new tax revenues of up to $1.2 trillion. "I was willing to take a lot of heat from my party," Obama said. "It is hard to understand why Speaker Boehner would walk away from this kind of deal." Boehner said he had an agreement with the White House for $800 billion in revenue, but Obama added $400 billion at the last week. "I'm confident that the bipartisan leaders here in the Congress can act," Boehner said. "If the White House won't get serious, we will." Over the Senate, Republican leader Mitch McConnell and Democratic leader Harry Reid -- who will also be at today's White House meeting -- have been working on a complicated legislative deal that would basically allow Obama to raise the debt ceiling on his own, in exchange for about $1.5 trillion in budget cuts. But there's some question as to whether a Reid-McConnell plan could pass the Republican House. They've been talking about budget cuts of some $1.5 trillion, less than the GOP has been seeking. For more details click here >>>