Sunday, July 31, 2011

US Senate puts off debt vote, citing progress in talks (AFP)

WASHINGTON (AFP) ? Democratic US Senate Majority Leader Harry Reid put off a contentious procedural vote on a White House-backed plan to avert a disastrous debt default, citing progress toward a compromise.

"There are negotiations going on at the White House to avert a catastrophic default on the nation's debt. There are many elements to be finalized and there is still a distance to go," he said.

With a midnight Tuesday deadline closing in, Reid said that he was putting off to 1:00 pm (1700 GMT) a procedural vote on his plan to raise the $14.3 trillion US debt limit -- a bill Republicans had vowed to kill.

"I spoke to the White House quite a few times this evening, and they've asked me to give everyone as much time as possible to reach an agreement if one can be reached," said the lawmaker, a close ally of President Barack Obama.

"I'm glad to see this move toward cooperation and compromise. I hope that it bears fruit," said Reid, who said he was "confident" that a final deal would embrace a long-term increase in the US debt ceiling.

The US economy hit that limit on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally -- but can only do so through August 2.

Business and finance leaders have warned that default would send crippling aftershocks through the fragile US economy, still wrestling with stubbornly high unemployment of 9.2 percent in the wake of the 2008 global meltdown.

Absent a deal, the US government will have to cut an estimated 40 cents out of every dollar it spends, forcing grim choices between defaulting on its debt or cutting back on programs like those that help the poor, disabled and elderly.

Source: http://us.rd.yahoo.com/dailynews/rss/uscongress/*http%3A//news.yahoo.com/s/afp/20110731/ts_alt_afp/useconomypoliticspublicdebtvotereid

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