03 Aug, 2011

US avoids default as Obama signs debt bill into law

US President Barack Obama yesterday signed the legislation which has increased the country’s debt ceiling by up to $2.4trillion from $14.3 trillion, averting a financial default.

The President said:”It’s an important first step to ensure… we live within our means”

The signing was the final step for the bill after Congress voted in favour of a bipartisan compromise deal, and it cleared in the Senate by 74 votes to 26.  It came just 10 hours before the deadline for Washington to raise its borrowing limit, following lengthy talks between Republicans, Democrats and the White House.

It is expected to make savings of at least $2.1tn in 10 years.

The treasury had warned that without raising the debt ceiling, the US would have been unable to meet all its bills.

However, some Democratic and Republican lawmakers have been opposed to the legislative move all along.

Democratic majority leader Harry Reid, after the vote, said:”Neither side got all it wanted, each side laments what it didn’t get.

“Today, we made sure that America will pay its bills, now it’s time to make sure all Americans can pay theirs.”

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