By Alexander Bolton - 08/02/11 03:41 PM EDT
The Senate will vote at noon Tuesday to approve a bipartisan deal to raise the debt limit by at least $2.1 trillion and send it President Obama before the 11:59 p.m. deadline.
The deal is expected to attract strong support from mainstream senators on both sides of the aisle while the chamber’s most liberal and conservative members will vote no.
Wall Street, however, did not seem impressed by the deficit-reduction package, as the Dow Jones Industrial Average fell by 0.75 percent and the Standard & Poor’s 500 fell by 1 percent Tuesday morning.
Senators from both parties lined up to praise and criticize the agreement.
Sen. Bill Nelson (D-Fla.) said the agreement would pass in an overwhelming vote and allow Congress to “turn our attention back to the economy and creating jobs which we so desperately need to bring us out of this recession that has been lingering too long.”
Sen. Johnny Isakson (R-Ga.) also declared his support on the Senate floor.
“I will be voting for us to be cutting spending where we need to — not as much as I would have liked but a lot more than we’ve ever seen before,” Isakson said. “But most importantly, voting for the assurance that never again will a debt ceiling go up without a debate for commensurate cuts in spending.”
Conservatives and liberals, however, criticized the agreement and said they would vote no.
Sen. Mike Lee (R-Utah) took to the Senate floor to point out that the agreement would add $10 trillion to the deficit over the next 10 years and called for passage of a balanced-budget amendment.
Sen. Jeff Merkley (D-Ore.) said the spending cuts in the deal could cost 100,000 to 300,000 jobs.
“Doesn’t this deal take us in the wrong direction?” Merkley said. “Shouldn’t we be on this floor working to create jobs, not to destroy jobs?”
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Lawmakers in favor of and opposed to the agreement, which would lock in $917 billion in spending cuts and raise the debt limit by $900 billion in two steps, said Congress would need to pass another round of deficit reduction.
When asked Monday if there was still need for comprehensive deficit reduction, Senate Majority Leader Harry Reid (D-Nev.) said: “The answer is not only yes, but hell yes.”
“We’ve made a step forward and that’s good,” Reid said. “And as everyone knows, the idea of the joint committee was my proposal. I am glad that [Senate Republican Leader Mitch] McConnell [Ky.] has put his arms around this. I hope we can get something done.”
The agreement sets up a select 12-member committee tasked with recommending another $1.5 trillion in savings. If the committee deadlocks or Congress fails to act on its recommendations, it would automatically trigger $1.2 trillion in spending cuts, divided evenly between defense and non-defense programs.
The package could save as much as $2.4 trillion over the next 10 years, but lawmakers say additional reforms need to be made to put the federal government on sounder fiscal footing.
Reid declined to say Monday whom he might appoint to the panel, other than to promise he would pick lawmakers with open minds.
“I have two weeks to do it after this bill is passed. And it’s extremely important that I pick people who are willing to make hard choices but are not locked in,” he said.
Several lawmakers have expressed hope the select committee can assemble the far-reaching deficit-reduction deal that eluded President Obama and House Speaker John Boehner (R-Ohio) last month.
“I think that super-committee is going to come up with significant deficit reduction,” Nelson said. “They’ve got a target of about an additional $1.5 trillion over the next 10 years. But they’re not limited to that. And everything’s on the table.”