WASHINGTON (AFP) – The fate of a massive US austerity plan headed Monday into the hands of Congress, where leaders have just hours to win over skeptical lawmakers or face an unprecedented debt default.
President Barack Obama late on Sunday unveiled a package of more than $2.4 trillion in spending cuts over the next decade and said it enjoyed the support of lawmakers from both parties, cheering anxious global markets.
Vice President Joe Biden, a 36-year veteran of the Senate, headed to Capitol Hill to press members of his Democratic Party to support the deal. Leadership aides hoped both the House of Representatives and Senate would vote by late Monday.
Key powerbrokers in the Senate threw their support behind the plan. But the deal faced less certain prospects in the House, where both liberal Democrats and "Tea Party" conservative Republicans voiced alarm.
"This deal is a sugar-coated Satan sandwich. If you lift the bun, you will not like what you see," said Democratic Representative Emanuel Cleaver, who heads the Congressional Black Caucus.
Liberal lawmakers are aghast that the plan only consists of cuts without sizable increases in revenues. The Obama administration has kept open the possibility of letting tax cuts for wealthy Americans expire in 2013, but it is not part of the package.
The blueprint negotiated between Obama and congressional leaders would include more than $900 billion in cuts over the next 10 years -- $350 billion of it in defense. A special congressional committee would then be tasked with coming up with another $1.5 trillion in cuts by November 23.
A failure by the committee would trigger automatic cuts -- half in defense spending, a priority for many Republicans. Automatic cuts would not touch Democratic-backed Social Security and Medicare payments for the elderly, although it would still affect providers of the health care program.
The Tea Party movement, which made strong gains in November elections, has pressed Republican House Speaker John Boehner to stand firm on spending cuts and against any hike in taxes.
Representative Michele Bachmann, a Tea Party favorite who is seeking the Republican presidential nomination, opposed the package saying it "spends too much and doesn't cut enough."
Representative Steny Hoyer, the number two Democrat in the House who is considered a centrist, pressed Boehner to win passage of the deal, saying that more than 150 of the 240 Republicans in the House would need to vote yes.
"This obviously gets them a lot of what they want and I think that the leadership is going to be tested to see whether or not they can deliver. They haven't been very good at it," Hoyer told MSNBC television.
David Plouffe, a senior adviser to Obama, defended the deal as a compromise, saying that neither side should expect to win everything. He voiced confidence that Congress will approve the package.
"Obviously each member is going to have to evaluate this. But we think, at the end of the day, this is an agreement that will pass the Senate and the House and the president will sign into law," Plouffe told NBC's "Today" show.
In a key point for Obama, the package will raise the debt ceiling into 2013 --- meaning he will not be forced into a similar showdown with Congress on spending in the midst of his re-election campaign next year.
"It ensures... that we will not face this same kind of crisis again in six months, or eight months or 12 months," Obama told a hastily called press briefing late Sunday.
"And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy," he said.
The debt ceiling would rise by about $2.4 trillion in two steps. The US government hit its current debt limit of $14.3 trillion on May 16 and has since been operating through spending and accounting adjustments, as well as higher than expected tax revenue.
Obama said the cuts would bring annual domestic government spending to the lowest level in 60 years but not come so "abruptly" as to drag down the US economy, still struggling with stalled growth and 9.2 percent unemployment in the wake of the 2008 meltdown.
Markets broadly welcomed the package. The Dow Jones Industrial Average soared 0.77 percent in initial trade on Monday but later faltered. Asian and European bourses rallied.
Japan, the second-largest holder of US debt after China, hailed the deal, with Chief Cabinet Secretary Yukio Edano saying it "will lead to the stabilization of markets."
China made no official comment. But state-controlled television criticized the deal, calling it "more "pomp and ceremony than substance."
Crude oil prices also jumped on news of the deal. But the dollar fell against the euro on fears that the United States may still face a downgrade to its coveted AAA credit rating, traders said.
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