President Barack Obama on Sunday announced a last-minute deal to
raise the U.S. borrowing limit and avoid a catastrophic default and he
urged lawmakers to "do the right thing" and approve the agreement.
Laying out the endgame in the U.S. debt crisis just two
days before a deadline to lift the borrowing limit, the White House and
congressional leaders said the compromise would cut about $2.5 trillion
from the deficit over the next 10 years.
With Republican and Democratic leaders in agreement,
the Senate will likely vote on the proposed agreement on Monday, a
senior congressional aide said. House of Representatives Speaker John
Boehner said he would bring it to a vote in that chamber as soon as
"There are still some very important votes to be taken by members of Congress," Obama told reporters at the White House.
"But 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."
"I want to urge members of both parties to do the right
thing and support this deal with your votes over the next few days,"
He said the first phase of the two-stage plan called
for about $1 trillion in spending cuts over the next decade. The next
$1.5 trillion in savings must be found by a special congressional
committee by the end of December.
Financial markets showed signs of relief at a deal in
the making to meet Tuesday's deadline, as U.S. stock futures jumped and
the dollar rebounded on Sunday.
Democratic and Republican leaders planned to try to
sell the deal to their rank-and-file on Monday. Leaders in the Senate
announced agreement on the deal, but support remained especially
uncertain in the House of Representatives.
Democratic Leader Nancy Pelosi, a leading liberal
considered crucial to delivering enough Democratic votes to offset
Republican defections, suggested earlier that the terms under
negotiation would be a tough sell in her party.
A deal would ease the immediate crisis but
repercussions will be felt for years to come. Bitter brinkmanship has
turned dysfunction seemingly into the norm in Washington, undercut
America's stature as the world's capitalist superpower and set the stage
for a deeply ideologically 2012 presidential race when President Barack
Obama is seeking re-election.