untenable situation, page-13

From http://www.abc.net.au/news/2011-08-01/obama-announces-us-debt-deal/2819156

"President Barack Obama says Democrat and Republican leaders have reached an agreement to reduce the US deficit and avoid a potentially disastrous default.

Congress has less than two days before the Treasury deadline of August 2 to lift America's $US14 billion borrowing limit and avert a possible default which would sow chaos in the fragile world economy.

This morning Mr Obama said agreement has been reached on a deal which would see $US1 trillion in cuts initially, with a super congressional committee to find more savings to lift the federal borrowing limit beyond the 2012 election.

"There are still some very important votes to be taken by member of Congress, 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 affect on our economy," Mr Obama said in a hastily-arranged White House press conference this morning.

"We're not done yet. 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."

Mr Obama said spending cuts included in the deal would not happen so quickly that they would drag on the fragile US economy.

Passage of the bill through Congress would end a months-long impasse over raising the nation's $US14.3 trillion debt ceiling.

The bipartisan plan will be presented to Democrats and Republicans on Monday (local time), Senate Majority Leader Harry Reid said.

"Leaders from both parties and in both chambers will present this agreement to our caucuses tomorrow," he said.

"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."

House Speaker John Boehner told fellow Republicans he aimed to bring the deal up for a vote "as soon as possible" even though it was not perfect, his office said.

"My hope would be to file it and have it on the floor as soon as possible," Mr Boehner said on a conference call, according to excerpts released by his office.

"This isn't the greatest deal in the world. But it shows how much we've changed the terms of the debate in this town."

Tokyo shares rose 1.70 per cent and the US dollar briefly rose above 78 yen just minutes after Mr Obama's announcement.

More to come."