The U.S. Senate is now expected to vote on the debt-ceiling compromise bill on Tuesday at noon.
The House passed the bill 269-161 earlier this evening. One of the representatives who voted yes was Gabrielle Giffords, D-Arizona, who cast her first vote since she was shot in Tucson in January.
The two-stage deal reached Sunday by President Barack Obama and congressional leaders calls for $2.4 trillion in savings over the next decade, although the the Congressional Budget Office pegs the savings at $2.1 trillion. It also authorizes an increase in the nation's borrowing limit through the end of 2012. A special congressional committee to recommend long-term fiscal reforms is also part of the package.
In the first stage, $917 billion in spending cuts will be accompanied by a $900 billion increase in the debt ceiling.
A special joint congressional committee would recommend a further $1.5 trillion in deficit reductions. If approved by the full Congress by year's end, Obama could raise the debt ceiling by $1.5 trillion. If not, the ceiling could rise by $1.2 trillion, but doing so would trigger matching mandatory across-the-board spending cuts likely to be unpopular with both parties.
The legislation needs to reach Obama's desk by Tuesday at the latest, according to the Treasury Department. If the current $14.3 trillion debt limit is not increased by that point, the federal government wouldn't be able to pay all its bills on time, and Americans could face rapidly rising interest rates, a falling dollar and shakier financial markets, among other problems.
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