House Passes $2.1 Trillion U.S. Debt-Limit Increase Plan
‘Not One Red Cent’
“It’s hard to believe we are putting our best foot forward with the legislation that comes before us today,” said House Democratic leader Nancy Pelosi of California. “Not one red cent” will come from the wealthiest Americans to cut the deficit, she said. Still, she said she supports the plan because it ends economic uncertainty and prevents cuts in Social Security and Medicare.
Treasuries rose, pushing the yields on 10-year notes to the lowest level since November, as an index showed U.S. manufacturing expanded in July at the slowest pace in two years.
Yields on benchmark 10-year notes fell five basis points, or 0.05 percentage point, to 2.74 percent at 5:02 p.m. in New York, according to Bloomberg Bond Trader prices. The 3.125 percent securities due in May 2021 gained 14/32, or $4.38 per $1,000 face amount, to 103 8/32.
U.S. stocks slumped. The Standard and Poor’s 500 lost 0.4 percent to 1,286.94 at 4:19 p.m. in New York after climbing as much as 1.2 percent earlier. The Dow Jones Industrial Average retreated 10.75 points, or 0.1 percent, to 12,132.49 today after rising 139 points.
No Tax Increase
House Republican leaders cast the deal as a victory because it doesn’t raise taxes and makes most of the spending cuts they sought.
“It gives us the best shot that we’ve had in the 20 years that I’ve been here to build support for a balanced budget amendment to the Constitution,” to put “fiscal handcuffs” on Congress, House Speaker John Boehner of Ohio told reporters.
Ryan said his party got two-thirds of the cuts to discretionary spending that it wanted.
“This legislation is typical for compromise legislation,” said Senate Majority Leader Harry Reid, a Nevada Democrat. “Neither side got what they wanted.”
Senator Mark Warner, a Virginia Democrat, said he will support the legislation though it doesn’t do enough to tackle long-term spending and revenue. Warner, one of a bipartisan group that offered a $3.7 trillion deficit-cutting plan, said, “This doesn’t get us to the core problem of how do we take on tax reform, how do we take on entitlement reform.”