Obama Announces US Debt Deal - August 1st

 President  Obama says Republican and Democratic leaders have reached an agreement on raising the US debt limit and avoiding default. He said the deal would cut $1tn of spending over 10 years, and set up a committee to report by November on a proposal to further reduce the deficit.But Congress still has to approve the deal, and with votes in both houses expected on Monday. The parties face a Tuesday deadline to raise the $14.3tn (£8.7tn) debt limit.
"I want to announce that 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," Mr Obama said.
The  president said it was not the deal he would have preferred, but noted that the
compromise plan would make a "serious downpayment" on the US deficit.

Democrats and Republicans in Washington have been deadlocked over finding a plan on how to cut spending and raise the debt limit as the Tuesday deadline approaches.
The president says it's not the perfect deal. But he and the leaders of both parties now believe they have the framework for something they can put to their party rank and file.
It's still likely to be a tough sell. The Republican Tea Party members are unlikely to support it because the cuts don't go far enough, and many Democrats will be furious that it doesn't include tax hikes. Both sides will hold further discussions on Monday before the agreement is drafted into legislation that can be put to a vote.

 America's credit rating may still be downgraded, but it now looks more likely that the
world's most powerful economy will be spared the humiliation of not being able to pay its bills on Tuesday.The US limits by law the total amount of debt its government can run up in order to pay its bills, and the Obama administration has been under mounting financial pressure.

Mr Obama said the process of agreeing on a plan had been messy and had taken "far too long", and he called on parties to support the plan in votes in Congress. He stressed that any solution had to be "balanced", and that cuts would not be so abrupt as to create a drag on the US economy.

The focus now shifts back to Congress with votes expected on Monday According to Mr Boehner, those savings would amount to at least $1.5tn, bringing the total spending cuts under the plan to about $2.5tn.
In recent days, Republicans, who control the House of Representatives, and Democrats, who control the Senate, have rejected plans drawn up by the rival party in an unprecedented political battle. Mr Obama opposed the Republican plan because it would only have raised the debt limit by enough to last until mid-2012, meaning Washington would have had to readdress the issue during next year's presidential campaign.
He said the plan announced on Sunday, if approved, would avoid such a scenario.