US debt limit bill heads to Senate before deadline all Update

The US Senate is to vote on a bill to raise the nation’s debt limit, one day after the House of Representatives backed it and hours before a deadline.
 

Monday’s vote in the House appears to have averted the prospect of the first full scale US federal debt default.

Members of the 100 seat Senate will vote at midday (16:00 GMT) on Tuesday. If approved it will be signed into law by President Barack Obama. The deals ties $2.4tn (£1.5tn) debt increase to spending cuts. The Senates vote will take place barely 12 hours before Washington is due according to the US treasury department to cease to be able to meet all its bills.

In the House on Monday evening the bill passed by a clear margin of 269 votes to 161.

Despite ongoing reservations about how the bill would fare with conservative members of the House, the bill won the backing of 175 Republicans, with 66 voting against.

Democrats were more evenly split 95 for and 95 against.

US Debt Chart

The deal, hammered out over the weekend after weeks of feverish speculation, raises the debt limit by up to $2.4tn from $ 14.3tn, and makes savings of at least $2.2tn in 10 years.

In a key point for President Obama, the bill would raise the debt ceiling into 2013- meaning he would not face another congressional showdown on spending in the middle of his re-election campaign next year.

The deal would enact more than $900bn in cuts over the next 10 years. It would also establish a 12 member House Senate committee charged with producing up to 1.5tn of additional deficit cuts a decade. If the panel failed to produce at least $1.2tn in deficit saving, spending cuts would take effect across much of the federal budget.