President Signs Debt Plan, Committee to Tackle Spending Cuts

After months of arguing between lawmakers, President Barack Obama finally signed a debt plan into law on Tuesday, helping the nation avoid default with only hours to spare. Now, lawmakers move on to the next step in the process, which is to set up a committee to tackle exactly how spending cuts specified in the plan will be implemented.

Senate Approves Plan, Obama Signs It Into Law

After the House of Representatives passed the bill on Monday, approving the debt plan with a 269-161 vote, the Senate voted 74-26 in favor of the deal, helping the nation avoid a dreaded default. After the deal was passed, Senators rushed the bill to Obama so he could quickly sign it into law.

The law raises the government’s borrowing limit by $2.4 trillion while cutting federal spending by $917 billion. Also, it requires lawmakers to make $1.5 trillion in deficit reductions that must incorporate both tax increases and cuts to safety-net programs.

Committee Required to Manage Deficit Reductions

Because questions still have to be answered regarding how the $1.5 trillion in deficit cuts will be managed, the debt plan calls for a committee to be formed that will collectively decide exactly how and where cuts will be made.

Selections for the special committee will be made over the next two weeks. It will consist of six Democrats and six Republicans. They will be responsible for deciding how to administer the spending cuts and must make their decision no later than Nov. 23.

Lawmakers say the spending cuts will help boost the economy by reining in federal borrowing, which is one of the reasons that the national debt was able to surpass the ceiling of $14.3 trillion set in place in 2010. Making cuts across the board, coupled with the new debt limit, should prevent the nation from the threat of default in the near future.