Republicans and Democrats are in “rough agreement” on plans to raise America’s debt limit, US President Barack Obama reportedly said last night. A crucial Senate vote on the issue has been postponed until Sunday afternoon.
The information comes shortly before the deadline of August 2, when many feared the country would announce a default.
An agreement on increasing the nation’s 14.3 trillion dollar debt ceiling would mean increased borrowing until after the next presidential election. As an unnamed source familiar with the talks told Bloomberg last night, the White House and congressional Republicans have already sketched out the contours of such an agreement.
This framework would include immediate spending cuts of one trillion dollars, as well as the creation of a committee to work out ways to make additional savings of up to 1.8 trillion dollars later this year. The Congress would have to approve the new panel’s recommendations by late December. Otherwise, government departments and programs, including defense and Medicare, would face automatic cuts.
On Friday, a proposal to raise the debt-ceiling was passed in the Republican-dominated House of Representatives, but the Democrat-controlled Senate killed it hours later.
The US Capitol has remained in deadlock as they try to avoid a default, ahead of Tuesday’s deadline.