Senate set to approve US debt bill

2 August 2011

Officials in the US appear set to approve a proposal designed to reduce the country's budget deficit today (2 August).

Members of the House of Representatives voted to pass a bill yesterday that will see President Obama raise the nation's debt ceiling by more than $2 trillion, amid genuine fears that it could lose its AAA credit rating for the first time in history.

This was widely deemed to be the toughest obstacle for this agreement to pass - as the House is led by the Republicans - and, according to Reuters, the Senate will follow suit by voting for the motion when it meets later today.

However, the ratification of the bill will merely provide short-term respite to the hotly-debated topic on how America should deal with its financial problems, the news source added.

Greg McBride, senior analyst at online resource Bankrate, commented: "The resolution to the debt ceiling does remove one cloud of uncertainty but it does not change the economic reality."

By Tony Aynsley

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