WASHINGTON â€” With the deadline for raising the nationâ€™s debt ceiling only hours away, President Barack Obama signed a historic deficit-reduction package into law Tuesday that aims to cut trillions of dollars from federal spending while increasing the debt limit immediately.
Obama acted just hours after the Senate passed the bill on a bipartisan 74-26 vote.
The president called the weeks-long standoff over raising the debt ceiling â€œa manufactured crisisâ€ that didnâ€™t help a faltering economy.
â€œItâ€™s 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,â€ he said. â€œAnd it was something that we could have avoided entirely.â€
He also made it clear that heâ€™ll continue to press for tax increases in the months ahead to help balance the federal budget.
â€œSince you canâ€™t close the deficit with just spending cuts, weâ€™ll need a balanced approach where everythingâ€™s on the table,â€ he said. â€œEveryoneâ€™s going to have to chip in. Thatâ€™s only fair. Thatâ€™s the principle Iâ€™ll be fighting for during the next phase of this process.â€
During debate on the Senate floor, even supporters were similarly unsatisfied with the result of all the weeks of acrimonious Washington deal-making.
â€œOn this matter my conscience is conflicted,â€ said Senate Assistant Majority Leader Richard Durbin, D-Ill. â€œIf this bill should fail, we will default on our nationâ€™s debt … terrible things will ensue.â€ But he also worried about its trillions of dollars in spending cuts and â€œall of the consequences on innocent people in America.â€
The Senate Republican leader, Mitch McConnell of Kentucky, was a bit more upbeat. â€œWeâ€™ve had to settle for less than we wanted, but what weâ€™ve achieved is in no way insignificant. And we did it because we had something Democrats didnâ€™t.
Republicans may only control one half of one third of the government in Washington. But the American people agreed with us on the nature of the problem,â€ he said.
â€œAnd if youâ€™re spending yourself into oblivion, the solution isnâ€™t to spend more, itâ€™s to spend less.â€
The Senate action followed the Monday vote in the House of Representatives, when a bipartisan majority also approved the deal. In the House, 174 House Republicans and 95 Democrats voted for the measure, and 66 Republicans and 95 Democrats voted against it.
The mood in the Senate was similar to that in the House â€” reluctant acceptance of the package.
â€œTo say the legislation before us is not ideal is truly an understatement,â€ said Sen. Carl Levin, D-Mich.
But he added, â€œdespite its many flaws, the legislation must pass.â€
Conservatives and liberals, though, had different reasons for opposing the measure.
â€œAt the end of the day, this bill allows Washington to continue business as usual in the irresponsible way it spends hard-earned tax dollars.,â€ said Sen. James Inhofe, R-Okla.
From the left, Sen. Bernard Sanders, I-Vt., had a different complaint.
â€œThe wealthiest people in this country and the largest corporations who are doing phenomenally well today are not being asked to contribute one penny in shared sacrifice toward deficit reduction,â€ he said.
â€œOn the other hand, middle-class and working families who are suffering terribly in the midst of this horrible recession are being asked to shoulder 100 percent of the human cost of lowering our deficit. This is not only grossly unfair, it is bad economic policy.â€
The agreement would cut deficits by $917 billion over 10 years, according to an analysis by the nonpartisan Congressional Budget Office. Those reductions would allow the debt limit to be raised by $900 billion, which is expected to be enough to last through early next year.
About $350 billion would come from defense spending. The rest would come from cuts to a variety of domestic programs, such as education, housing and transportation. Medicare, Medicaid and Social Security wouldnâ€™t be cut.
A second series of reductions, totaling as much as $1.5 trillion, would be subject to a vote by late December. A special bipartisan joint congressional committee will recommend specifics.
The committee must make recommendations by Nov. 23, and Congress must vote on them by Dec. 23.
If those recommendations arenâ€™t approved on up-or-down, non-amendable votes in Congress, programs would be cut automatically across the board â€” half from defense, half from non-defense â€” starting in 2013. Social Security, Medicaid, military and civilian pensions, and most low-income programs would be exempt. Medicare cuts would be restricted to payments to providers, and limited.
Once the reductions are made, the debt limit would go up by at least another $1.2 trillion, which is expected to allow the government sufficient borrowing authority through 2012.