President Barack Obama and Republican congressional leaders reached historic agreement Sunday night on a compromise to permit vital U.S. borrowing by the Treasury in exchange for more than $2 trillion in long-term spending cuts. The U.S. House passed the debt ceiling deal on Monday and sending it to the Senate for consideration.
On Monday, the House overcame opposition from liberal Democrats and tea party conservatives for ideologically different reasons to pass the measure by a 269-161 vote.
State officials are still parsing the debt-ceiling bill for details of how it will affect them. While it eliminates the immediate threat of a crisis that could impose higher borrowing costs and shut off the flow of federal funds, officials are concerned that the cuts will place added burdens on their budgets. This is the fourth straight fiscal year in which states faced budget deficits.
The debt-ceiling agreement doesn’t spell out how cuts are to be made, and much of that decision-making is left to a bipartisan congressional panel.
A number of Republicans worried about cuts in defense spending and the lack of a required balanced-budget amendment to the Constitution. Progressive Democrats were livid over the extent of the deal’s domestic spending cuts, as well as the absence of any immediate tax hikes on wealthier Americans.