President Barack Obama has signed legislation Tuesday to raise the U.S.
debt ceiling, averting a potential government default only hours before
the deadline. The president called the bill an important first step
toward fiscal responsibility.
Barack Obama works on his remarks in the Outer Oval Office before making
a statement to the press regarding the Senate's vote on the Budget
Control Act of 2011, Aug. 2, 2011. Pictured, from left, are: Director of
Communications Dan Pfeiffer; Press Secretary Jay Carney; Jon Lovett,
Associate Director of Speechwriting; and Senior Advisor David Plouffe.
(Official White House Photo by Pete Souza)
The president's signature on the legislation defuses what might have
been a far-reaching crisis for the U.S. economy.
Minutes after the Senate passed the bill by a of vote of 74 to 26, Obama
told reporters at the White House that the process of reducing the
government's deficit has begun.
"This compromise guarantees more than $2 trillion in deficit reduction,"
said Obama. "It is an important first step to insuring that, as a
nation, we live within our means."
The new law immediately allowed the Treasury to borrow an additional
$400 billion, with more borrowing allowed later. It is also intended to
reduce the nation's $14.3 trillion deficit by at least $2.1 trillion
over 10 years. The House of Representatives passed the bill on Monday by
a vote of 269 to 161, after weeks of intense debate.
Under the bill, a bipartisan committee in Congress will work to find
further savings in federal budgets.
The president said the agreement requires that both major political
parties work together on a larger plan to cut the federal budget
deficit, which he said is important for the long-term health of the U.S.
Obama said that plan would need to include cuts to social programs, a
move that many Democrats oppose, and higher taxes, which many
Republicans reject. Neither option was included in the compromise
"Yes, that means making some adjustments to protect health care programs
like Medicare, so they are there for future generations," Obama added.
"It also means reforming our tax code, so that the wealthiest Americans
and biggest corporations pay their fair share."
In addition, lawmakers will also consider a constitutional amendment
requiring the government to balance its budget.
Republican Senator John Barrasso said such an amendment would prevent
another debt crisis.
"The question is, 'Are we going to be living by the same rules that
apply to every family, every small business and 49 states, which is,
that they cannot spend more money than they have?'" asked Barrasso.
Obama angrily denounced lawmakers for allowing the debt debate to linger
until hours before the default deadline. He said a "manufactured crisis"
in Washington has hurt the struggling U.S. economy.
"That was in our hands," Obama said. "It is pretty likely that the
uncertainty surrounding the raising of the debt ceiling, for both
businesses and consumers, has been unsettling and just one more
impediment to the full recovery that we need. And it was something that
we could have avoided entirely."
president said it should not take the risk of "economic catastrophe" to
force lawmakers to work together and do their jobs. He said the priority
now is for Democrats and Republicans to focus on creating jobs and
reviving the U.S. economy.
The top House Democrat, Minority Leader Nancy Pelosi, agreed that
lawmakers must immediately turn their attention to economic recovery.
"Yesterday we crossed a bridge," said Pelosi. "Enough talk about the
debt. We have to talk about jobs."
Obama called on Congress to pass numerous bills that he said would
strengthen the economy, including approving free trade agreements with
Colombia, Panama and South Korea.