US President Barack Obama announced an 11th-hour deal with the US Congress to avert an unprecedented default on US debt payments, triggering a widespread rally on stock markets yesterday and sighs of relief around the world.
With just two days left before the US would run short of cash, Obama and his Republican foes said late on Sunday after round-the-clock negotiations that they had reached a framework for more than US$2.4 trillion in spending cuts.
“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,” Obama said.
Photo: AFP
“This process has been messy; it’s taken far too long,” Obama told a hastily convened evening press conference. “Nevertheless, ultimately, the leaders of both parties have found their way toward compromise.”
However, the package still needs approval from Congress. Leaders of the Democratic-held US Senate and Republican-led US House of Representatives were working to rally polarized lawmakers.
“To pass this settlement, we’ll need the support of Democrats and Republicans in both the House and Senate. There is no way either party — in either chamber — can do this alone,” US Senate Majority Leader Harry Reid said.
US House Speaker John Boehner called the plan a remedy to avert “a job-killing national default that none of us wanted.” However, the plan faces opposition both from the ultra-conservative “Tea Party” movement, which favors sweeping spending cuts, and progressive Democrats who want taxes on the wealthy before any thought of cutting social welfare programs.
As described by Obama and US congressional leaders, the deal would raise the country’s US$14.3 trillion debt ceiling by at least US$2.1 trillion. It would also make more than US$2.4 trillion in spending cuts in two steps, including through a special new committee required to submit proposals by Nov. 23.
In Washington, Republicans crowed that the framework did not explicitly call for raising tax revenues despite Obama’s repeated calls for increasing revenues from the rich and wealthy corporations.
The framework would also fulfill one of Obama’s top goals: giving cash-strapped Washington the ability to borrow by enough to avoid another politically fraught debt battle before he faces re-election in November next year.
The package would cut military spending by at least US$350 billion at a time that the US is looking to exit Iraq and Afghanistan. A White House official hoped half of total cuts would come from defense, but leading Republicans have already cried foul.
Obama trumpeted that the cuts would bring annual domestic government spending to the lowest level in 60 years, but promised they would not come so “abruptly” as to be a “drag” on the fragile US economy.
However, US Representative Raul Grijalva, a fellow Democrat and co-chair of the Congressional Progressive Caucus, rejected the framework in a blistering statement declaring: “This deal is a cure as bad as the disease. I reject it.”
Democratic House Minority Leader Nancy Pelosi said “we all agree that our nation cannot default,” but gave Obama’s announcement a chilly welcome.
“I look forward to reviewing the legislation with my caucus to see what level of support we can provide,” Pelosi said.
The New York Times was sharply critical in an editorial, saying that the deal was “a nearly complete capitulation to the hostage-taking demands of Republican extremists.”
Tea Party lawmakers have pushed for dramatic spending cuts and put strong pressure on Boehner. Tea Party favorite US Representative Michele Bachmann quickly voiced opposition to the package.
“The ‘deal’ he announced spends too much and doesn’t cut enough,” Bachmann, a Republican presidential candidate, said of Obama. “Someone has to say no. I will.”
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most
TECH EFFECT: While Chiayi County was the oldest region in the nation, Hsinchu county and city, home of the nation’s chip industry, were the youngest, the report showed Seven of the nation’s administrative regions, encompassing 57.2 percent of Taiwan’s townships and villages, became “super-aged societies” in June, the Ministry of the Interior said in its latest report. A region is considered super-aged if 20 percent of the population is aged 65 or older. The ministry report showed that Taiwan had 4,391,744 people aged 65 or older as of June, representing 18.76 percent of the total population and an increase of 1,024,425 people compared with August 2018. In June, the nation’s elderly dependency ratio was 27.3 senior citizens per 100 working-aged people, an increase of 7.39 people over August 2018, it said. That
‘UNITED FRONT’: The married couple allegedly produced talk show videos for platforms such as Facebook and YouTube to influence Taiwan’s politics A husband and wife affiliated with the China Unification Promotion Party (CUPP) were indicted yesterday for allegedly receiving NT$74 million (US$2.32 million) from China to make radio and digital media propaganda to promote the Chinese government’s political agenda and influence the outcome of Taiwan’s elections. Chang Meng-chung (張孟崇) and his wife, Hung Wen-ting (洪文婷), allegedly received a total of NT$74 million from China between 2021 and last year to promote candidates favored by Beijing, contravening the Anti-Infiltration Act (反滲透法) and election laws, the Chiayi District Prosecutors’ Office said. The couple acted as Beijing’s propaganda mouthpiece by disparaging Hong Kong democracy activists
EARLY ARRIVALS: The first sets of HIMARS purchased from the US arrived ahead of their scheduled delivery, with troops already training on the platforms, a source said The Ministry of National Defense (MND) yesterday said it spotted 35 Chinese military aircraft, including fighters and bombers, flying to the south of Taiwan proper on the way to exercises in the Pacific, a second consecutive day it has reported such activities. The Chinese Ministry of National Defense did not respond to a request for comment on the missions, reported just days before tomorrow’s US presidential election. The US is bound by law to provide Taiwan with the means to defend itself. Its arms sales to Taipei include a US$2 billion missile system announced last month. The MND said that from 9am yesterday,