President Obama: "It's an important first step to ensure... we live within our means"

The  Senate has passed a deal struck between Republicans, Democrats and President Obama to increase the US debt ceiling and avert a default. The bill passed the Senate by 74 votes to 26. Mr Obama is expected to sign the bill into law later on Tuesday as soon as it crosses his desk.

The bill raises the debt limit by up to $2.4tn (£1.5tn) from $14.3tn, and makes savings of at least $2.1tn in 10 years. The deal was struck after months of fierce negotiations between the White House and lawmakers of both parties. The vote came roughly 12 hours before Washington was due to run out of time. Without a deal to raise the debt ceiling the US would be unable to meet all its bills, according to the US treasury department.

Speaking at the White House shortly after the vote, President Obama said it was "pretty likely that the uncertainty surrounding the raising of the debt ceiling for businesses and consumers has been unsettling".
"It's something we could have avoided entirely," he added. The president warned more action was needed, saying it was impossible for the US to "close the deficit with just spending cuts". He urged Congress to now look to boost the economy through measures to create jobs and increase consumer confidence. "We can't balance the budget on the backs of the very people who have borne the biggest brunt of this recession," President Obama said, reprising one of his key themes of recent weeks.

Senate Majority Leader harry Reid said, following the vote," Today, we made sure that America will pay its bills, now its time to make sure all Americans can pay theirs”