Obama says deal reached to end debt impasse

WASHINGTON,  (Reuters) – President Barack Obama today announced a last-minute deal to raise the U.S. borrowing  limit and avoid a catastrophic default and he urged lawmakers  to “do the right thing” and approve the agreement.
Laying out the endgame in the U.S. debt crisis just two  days before a deadline to lift the borrowing limit, the White  House and congressional leaders said the compromise would cut  about $2.5 trillion from the deficit over the next 10 years.
With Republican and Democratic leaders in agreement, the  Senate will likely vote on the proposed agreement on Monday, a  senior congressional aide said. House of Representatives  Speaker John Boehner said he would bring it to a vote in that  chamber as soon as possible.
“There are still some very important votes to be taken by  members of Congress,” Obama told reporters at the White House.
“But I want to announce that the leaders of both parties in  both chambers have reached an agreement that will reduce the  deficit and avoid default — a default that would have had a  devastating effect on our economy.”
“I want to urge members of both parties to do the right  thing and support this deal with your votes over the next few  days,” Obama said.
He said the first phase of the two-stage plan called  for about $1 trillion in spending cuts over the next decade.  The next $1.5 trillion in savings must be found by a special  congressional committee by the end of December.
Financial markets showed signs of relief at a deal in the  making to meet Tuesday’s deadline, as U.S. stock futures jumped  and the dollar rebounded on Sunday.
Democratic and Republican leaders planned to try to sell  the deal to their rank-and-file on Monday. Leaders in the  Senate announced agreement on the deal, but support remained  especially uncertain in the House of Representatives.
Democratic Leader Nancy Pelosi, a leading liberal  considered crucial to delivering enough Democratic votes to  offset Republican defections, suggested earlier that the terms  under negotiation would be a tough sell in her party.
A deal would ease the immediate crisis but repercussions  will be felt for years to come. Bitter brinkmanship has turned  dysfunction seemingly into the norm in Washington, undercut  America’s stature as the world’s capitalist superpower and set  the stage for a deeply ideologically 2012 presidential race  when President Barack Obama is seeking re-election.