–Senate Passes Debt Ceiling Compromise Plan On 74 to 26 Vote
–Senate’s Passage of Bill, Sends It To President Obama
–Senate Majority Leader Reid: Bill Represents ‘Imperfect Compromise’
–Senate Minority Leader McConnell: GOP ‘Changed The Debate’ In DC

By John Shaw

WASHINGTON (MNI) – The U.S. Senate Tuesday approved compromise
legislation raising the debt ceiling, sending it to President Obama for
his signature and ending a months-long political battle.

The Senate approved the bill on a 74 to 26 vote.

Since the House approved the identical bill Monday, it now goes to
President Obama for his signature.

Before the final vote, Senate Majority Leader Harry Reid said the
final package was an “imperfect compromise” that begins the hard work of
cutting deficits.

He said further steps will require “equal sharing” in which both
spending cuts and additional revenues will be needed.

“There must be a sharing of sacrifice,” he said.

Senate Minority Leader Mitch McConnell said the legislation
reflects many of the goals of congressional Republicans to control
spending.

“We have changed the debate. We’re headed in the right direction,”
McConnell said, adding “much work remains.”

McConnell credited House Speaker John Boehner, saying “he set the
terms of the debate” by demanding deep spending cuts as part of the
package to increase the deficit.

McConnell said this represents a “new template” for debt ceiling
legislation going forward.

The House Monday approved the package crafted by Obama and
congressional leaders on a 269 to 161 vote. The bill’s passage through
the House was widely seen as the bill’s most serious challenge.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Timothy Geithner had said that Congress must pass
legislation increasing the debt ceiling by today.

The underlying bill calls for about $1 trillion in spending cuts
that will be implemented over a decade by adjusting discretionary
spending cuts.

The package also calls for the creation of a special congressional
panel to come up with $1.5 trillion in deficit reduction through
entitlement and tax reforms. This package would be submitted to Congress
by the special panel by Nov. 23, 2011 and voted on by the House and
Senate by Dec. 23, 2011.

If this panel, which will be comprised of six Republicans and six
Democrats, fails to agree on a spending cut package, a budget
enforcement trigger would secure $1.2 trillion in budget savings through
across-the-board cuts.

Under the legislation, the debt ceiling would be increased by
between $2.1 trillion and $2.4 trillion.

The debt increase would occur in two steps: by $900 billion
initially and a second increase of between $1.2 trillion and $1.5
trillion depending on the size of spending cuts approved.

Of the first $900 billion increase in the debt ceiling, $400
billion would occur immediately and the next $500 billion would be
subject to a congressional resolution of disapproval. To block the
increase, the resolution would have to be enacted over the president’s
veto, a step that requires two-thirds majorities in both chambers.

The debt limit package also requires both the House and Senate to
vote on a balanced budget amendment by the end of the year. The
specifics of the amendment have not been agreed to yet.

** Market News International Washington Bureau: (202) 371-2121 **

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