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US agrees debt ceiling rise of $2.1trn

by: IFAonline
  • 01/08/2011
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US agrees debt ceiling rise of $2.1trn
President Barack Obama has announced a deal to end the US debt crisis, which will raise the nation's debt ceiling by at least $2.1trn and cut the federal deficit by as much as $2.5trn over a decade.

The US President last night said leaders of both parties in the US House and Senate had approved the agreement, which must now be sold to Congress by 2 August, according to Bloomberg.

“This compromise does make a serious down payment on the deficit-reduction we need. Most importantly it will allow us to avoid default,” Obama said.

A raise in the debt ceiling by at least $2.1trn would serve the nation’s needs into 2013.

The deal includes a cut in spending over a decade of $917bn.

Initially the debt limit would be raised by $900bn, and then a special committee would be tasked with finding another $1.5trn in deficit savings by the end of the year.

Congress is expected to agree the deal.

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