FX.co ★ The US Senate Saved the Country from Technical Default

The US Senate voted for advancing the country’s debt limit and the state expenditures reduction program. CNN channel was carrying out live broadcast from the Senate meeting.
The votes ratio was 74 versus 26. For successful draft law adoption there must be 60 affirmative senators’ votes. Earlier the draft law was approved by the US House of Representatives. There were 69 “affirmative” votes, 161 – “negative”.
In compliance with the accepted program, the US debt limit will be advanced by 2,1 trillion dollars from the current edge of 14,29 trillion dollars (which was exceeded in May this year). The country’s state expenditures will be reduced in total by 2,5 trillion dollars. The plan realization will go through in two stages. At the first one the USA will cut spending by a trillion of dollars for 10 years, and the way of reducing 1,5 trillion dollars more must be found before November 23 by specially launched committee at the Congress. The draft law was approved by the Republican and Democratic Parties on the night of Monday, August 01. Negotiations between the President Barack Obama, the republican minority leader in the US Senate Mitch McConnell and the democratic majority head Harry Rid took 11 hours to lead to an agreement. As a result, the United States will be able to avoid a technical default which could happen if the parties wouldn’t reach a consensus.
On July 31 Great Britain being one of the biggest trade partners of the USA declared that a technical default will have disastrous consequences for other countries as well. Japan joined the UK statement.