Finance

Home page

Finance

US avoids debt default with last-minute dealâ€Ž

01 August 2011 07:51 (UTC +04:00)

Baku - APA-Economics. Republicans and Democrats in the US congress have reached an 11th-hour agreement with President Barack Obama to raise the limit on US borrowing and prevent an unprecedented US debt default, Aljazeera reported.

Just two days before a deadline to lift the US debt ceiling, the White House and both Republican and Democratic leaders in congress said the compromise would cut about $2.4tn from the deficit over the next 10 years.

Now that congressional leaders have sealed a deal, both the senate and House of Representatives are expected to vote on Monday and in principle a bill could be on Obama’s desk by the end of the day.

While the senate is likely to give its approval, the agreement’s fate may be less certain in the House.

If approved, the compromise would presumably preserve America’s sterling credit rating, reassure investors in financial markets across the globe and possibly reverse the losses that spread across Wall Street in recent days as the threat of a default grew.
After weeks of impasse and with the final outcome hinging on support from reluctant legislators, Obama pressured both sides to follow up on the accord reached behind closed doors.