Debt Limit – United States almost certainly avoid a debt default status. This is due to the decision of the House of Representatives who finally passed the government proposal to raise the new debt limit.
According to the Associated Press, the House decision was taken by voting in the House of Congress (Capitol Hill) in Washington DC on Monday night local time. A total of 269 House members support, while 161 opposed.
Decisions Still Have To Go Through Senate Voting
This decision was crucial, because it took place a day ahead of a deadline debt payments of U.S. government to creditors, especially bond holders, on August 2, 2011 local time. This decision still has to go through a vote in the Senate, which will take place Tuesday, but was seen as a formality because the possibility is also going to be approved before it was passed by President Barack Obama.
“This legislation will address the debt crisis and help Americans back to work,” said House Speaker John Boehner.
Debt issue is resolved after going through a long debate in Congress, among Democrats supporting the Government with the Republican opposition. The compromise came after President Barack Obama on the phone with John Boehner, Chairman of the House from Republicans.
With this decision, Congress supports the government’s proposal to raise the debt limit of a maximum of U.S. $ 2.4 trillion. The maximum current U.S. debt of U.S. $ 14.3 trillion, so that this limit be increased to U $ 16.5 trillion.
Government Must Save Budget Up To $2.3 Trillion
However, according to Republicans pressure who control the House, the government must save expenditure budget of U.S. $ 2.3 trillion for a period of ten years. Items which must be saved will be discussed by a special commission, which will make recommendations later this year.
In recent weeks, President Obama and his supporters and the opposition in Congress will negotiate strongly of effort to raise the maximum limit of government debt. If the government proposal was not met Congress until August 2, 2011, the U.S. could be at risk of default of debt and this lowers the U.S. image in the eyes of creditors.
According to BBC news stations, raising the debt limit is crucial for the U.S. to support the routine financing of state and government programs, whose costs are greater. According to projections, the U.S. debt in 2011 alone could reach U.S. $ 15.5 trillion. – Debt Limit
