Saturday, July 30, 2011

Senate defeats House debt-ceiling bill Senate leaders push own package; Obama urges compromise

 The Senate voted Friday night to set aside a House-passed bill that would raise the U.S. debt limit and cut the deficit, paving the way for a vote on Senate Democrats’ own measure and intense compromise talks as the clock ticked toward a potential government default next week.

Obama continued to warn that the debt limit needs to be raised by Tuesday to avoid default. Payments on Treasury debt, veterans’ benefits and government employees’ salaries would halt if the government can’t pay its bills, the White House says.

Credit-rating firms including Standard & Poor’s have warned that the United States could lose its coveted AAA rating without a credible plan to slash deficits. Obama invoked those warnings on Friday, saying the cost of borrowing would rise for all Americans.
“A lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, their car loans, their credit cards. And that’s inexcusable,” the president said.

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