White House, congressional leaders reach debt-limit deal

The agreement brings to an end a self-created crisis that has consumed Washington, rattled Wall Street, and shaken confidence in the American political system at home and abroad. The deal could clear Congress as soon as Monday night — barely 24 hours before Treasuryofficials have said they could begin running short of cash to pay the nation’s bills.

Passage of the agreement, however, remained far from certain in the House, where skeptical Republicans were just beginning to digest the details.

“This process has been messy. It’s taken far too long,” President Obama said in brief remarks at the White House. “Nevertheless, ultimately, the leaders of both parties have found their way toward compromise, and I want to thank them for that.”

Obama said the agreement “will allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis again in six months, or eight months, or12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.”

The deal was negotiated primarily by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.). It teetered all day on the edge of completion as House Speaker John A. Boehner (R-Ohio) bickered with Democrats over whether to freeze next year’s defense budget.

In the end, Boehner conceded the point, and Obama finalized the agreement in phone calls to each of the four congressional leaders shortly after 8 p.m.

The agreement would raise the $14.3 trillion debt limit in two stages by as much as $2.4 trillion. It represents a victory for Obama, allowing him to avoid another grueling fight over the debt limit in the heat of the 2012 presidential campaign.

But he failed to secure other top priorities, including fresh measures to revive the flagging recovery and an end to tax breaks for corporations and the wealthy. Obama said he would pursue those goals later this year, when, under the terms of the deal, a new congressional committee would begin searching for further ways to control the national debt.

“The ultimate solution to our deficit problem must be balanced,” Obama said Sunday. “That’s why the second part of this agreement is so important.”

Republicans, by contrast, won severe cuts to agency budgets over the next decade and the prospect of deeper cuts to come, delivering on the campaign promises that helped them gain control of the House in the fall congressional elections. Democrats also agreed to stage a vote on a balanced-budget amendment, which has become a rallying point for tea-party-aligned conservatives.

End of the impasse

The deal ends a painful political stalemate that had been in the making since the new GOP majority took control of the House in January. After a bitter showdown over this year’s budget nearly shut down the government in April, the parties launched into the debt-limit battle.