Obama: Debt deal is only a first step

In this image from House Television, Rep. Gabrielle Giffords, D-Ariz., center, appears on the floor of the House of Representatives Monday, Aug. 1, 2011, in Washington. Giffords was on the floor for the first time since her shooting earlier this year, attending a vote on the debt standoff compromise. (AP Photo/House Television)

In this image from House Television, Rep. Gabrielle Giffords, D-Ariz., center, appears on the floor of the House of Representatives Monday, Aug. 1, 2011, in Washington. Giffords was on the floor for the first time since her shooting earlier this year, attending a vote on the debt standoff compromise. (AP Photo/House Television)

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— WASHINGTON — President Barack Obama says the emergency bill Congress passed to prevent a government default is just the first step to ensuring the country lives within its means.

Speaking in the Rose Garden, Obama says lawmakers still need to find a balanced approach to reducing the deficit that includes some adjustments to Medicare and reforming the tax code so the wealthy pay more.

Obama spoke shortly after the Senate passed the bill to raise the debt ceiling and avert a potentially catastrophic default. The House approved the bill Monday.

The White House says Obama will sign the bill as soon as it lands on his desk.

POSTED EARLIER

WASHINGTON — The Senate emphatically passed emergency legislation Tuesday to avoid a first-ever government default, rushing the legislation to President Barack Obama for his signature just hours before the deadline. The vote was 74-26.

Obama planned to sign the bill promptly and also was making remarks at the White House.

Tuesday's vote capped an extraordinarily difficult Washington battle pitting tea party Republican forces in the House against Obama and Democrats controlling the Senate. The resulting compromise paired an essential increase in the government's borrowing cap with promises of more than $2 trillion of budget cuts over the next decade.

Much of the measure, which the House passed Monday night, was negotiated on terms set by House Speaker John Boehner, including a demand that any increase in the nation's borrowing cap be matched by spending cuts. But the legislation also meets demands made by Obama, including debt-limit increases large enough to keep the government funded into 2013 and curbs on growth of the Pentagon budget.

"We've had to settle for less than we wanted, but what we've achieved is in no way insignificant," said Senate GOP leader Mitch McConnell of Kentucky. "But I think it was the view of those in my party that we'd try to get as much spending cuts as we could from a government we didn't control. And that's what we've done with this bipartisan agreement."

Many supporters of the legislation lamented what they saw as flaws and the intense partisanship from which it was forged. In the end, it was a lowest-common-denominators approach that puts off tough decisions on tax increases and cuts to entitlement programs like Medicare.

"What troubles me about it is that the bipartisan compromise also represents a kind of bipartisan agreement by each party to yield to the other party's most politically and ideologically sensitive priority," said Joseph Lieberman, I-Conn. "In the case of Democrats, it's to protect entitlement spending. ... In the case of Republicans, it's to not raise taxes."

The measure would provide an immediate $400 billion increase in the $14.3 trillion U.S. borrowing cap, with $500 billion more assured this fall. That $900 billion would be matched by cuts to agency budgets over the next 10 years.

The Senate vote was never in doubt after Majority Leader Harry Reid, D-Nev., and McConnell signed on. But like Monday's House vote, defections came from liberal Democrats unhappy that Obama gave too much ground in the talks, as well as from conservative Republicans who said the measure would barely dent deficits that require the government to borrow more than 40 cents of every dollar it spends.

"This is a time for us to make tough choices as compared to kick the can down the road one more time," said freshman GOP Sen. Jerry Moran of Kansas.

The measure sets up a fall drama that promises to again test the ability of Obama and Republicans to work cooperatively. It establishes a special bipartisan committee to draft legislation to find up to $1.5 trillion more in deficit cuts for a vote later this year. They're likely to come from such programs as federal retirement benefits, farm subsidies, Medicare and Medicaid. The savings would be matched by a further increase in the borrowing cap.

There's no guarantee the committee, to be evenly split between the warring parties, will agree on such legislation. But there are powerful incentives to do so because more budget gridlock would trigger a crippling round of automatic cuts across much of the budget, including Pentagon coffers.

And questions linger about the effect the grueling political free-for-all will have on the U.S. credit rating.

Treasury Secretary Timothy Geithner told ABC News that he didn't know whether the debt-limit fight would cause America's AAA credit rating to be downgraded. "It's not my judgment to make," he said. Geithner also said he fears world confidence in the United States was damaged by "this spectacle."

Enactment of the measure provides welcome closure for Obama, who has seen his poll numbers sag during the debt-limit battle.

GOP presidential candidates such as Mitt Romney and Michele Bachmann issued statements opposing the legislation.

"As with any compromise, the outcome is far from satisfying," Obama conceded in a video his re-election campaign sent to millions of Democrats.

In a tweet, the president was more positive: "The debt agreement makes a significant down payment to reduce the deficit — finding savings in both defense and domestic spending."

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Comments » 5

26yearsonmarco writes:

Here is a possible solution:
66 Republicans and 95 Democrats had the good sense to vote against this Bill, which accounts for 37% of the total House membership of 433.
If the 161 members quit both of their Parties, and formed a new Party called, for example, ”The American Party”, or “We the People Party”, it would make up 37% of the House of Representatives, separate the Men from the Boys, and possibility restore some faith in our Government.

Is_It_True_Partially_True_Or_Not_True (Inactive) writes:

The democrats are more interested in building a voting base, no matter who the votes come from. Keep the illegals coming no matter who has to pay for them. Nothing but American Socialism.

Is_It_True_Partially_True_Or_Not_True (Inactive) writes:

Does not this Newspaper have a stated rule regarding IMPERSONATION? It appears that is does.
Then why do they allow Islandeye1_235971 to impersonate Islandeye1#236971?
Please correct this. Thank You

26yearsonmarco writes:

in response to islandeye1#236971:

(This comment was removed by the site staff.)

Yes, the Democrats have become servants of the unions, but the Republicans also have their share of what I call Republacrats that tell you what you want to hear, but vote with the Democrats every time. The two females from Maine are perfect examples.

ajm3s writes:

I found it refreshing regardless of political parties, that the freshmen who comprize a large portion of the TeaParty Caucus in the House of Representatives still held to their convictions and message they ran on. So much so the Speaker had to listen to them since they could not be assuaged. So the debt ceiling was challenged for the first time in 40 years.

With regard to Obama, he stated at the beginning of the year that he did not want any conditions to raise the debt limit and did not want to reduce spending (as evidenced by his budget proposal that was handily rejected 97-0).

So I ask when at the voting booth:

Vote 2012 and bear in mind, are you impressed with the "change". We are witnessing centralized governmental control be it local or national, be it socialist or however you wish to label these policies which have now resulted in the municipalities, states and federal governments now running out of money. And yes, there will be those that say just increase taxes and remove subsidies. But I say, the stimulus was primarily waste; the spending is wasteful so why would I want to feed this waste with more revenue?

A note to City Management: when will the city start promoting policies to enhance efficiencies and focus on the common needs of its citizens. And forgo the special projects under the guise it is for all the citizens.

Would we want a race track paid for by the citizens just because we could potentially use it, but in actuality only a few enthusiasts would benefit.

So rather than expansion of services and facilities, can we start with a primer:

http://www.sixsigmainstitute.com/down...

And get back to basics, like a functional financial accounting system and IT department to keep score. Or do we need a new expanded Community Center?

God help us!

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