Senate agree US debt bill

The US Senate has passed a bill to raise the debt ceiling and avoid a potential default. It will now be sent to the House of Representatives for a final vote. President Obama has said he will sign the bill "immediately" after the House vote.

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Obama slams Republicans after deal

President Obama said some Republicans had damaged US economy. Credit: REUTERS/Jason Reed

US President Barack Obama has blasted Republican opponents, who he said had damaged America's economy and credibility, issuing a stern rebuke after a prolonged stand-off that forced a government shutdown and threatened default.

As Congress reopened the US government on Thursday and signed off on more borrowing so America could pay its bills, the president warned that the deal reached at the last minute on Wednesday had quelled but not ended the deep political and fiscal crisis.

The House of Representatives is controlled by Republicans, often causing political wrangling. Credit: REUTERS/Joshua Roberts

The administration and its Republican opponents know the deal only pushed the unsolved and bitter ideological battle a few months into the future. Mr Obama warned against doing it again. "The American people are completely fed up with Washington," Mr Obama said in a forceful tone.

"Probably nothing has done more damage to America's credibility in the world than the spectacle we've seen these past few weeks," the president said in an impassioned White House appearance.

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Senator Harry Reid: Finding consensus was 'really hard'

Senate Majority Leader Harry Reid has admitted that it was "really hard" to find political consensus on a deal to raise the debt ceiling.

Addressing the Senate before unveiling the terms of the deal, he said it was a "gross understatement" to say that the eyes of the world have been on the US Congress in recent days.

He added that the agreement would provide the stability that the economy desperately needs.

US stock market surges as Congress deal emerges

The US stock market surged in early trading as political consensus appeared to be building towards a solution to the US debt crisis.

Traders work on the floor of the New York Stock Exchange Credit: REUTERS/Carlo Allegri

The Dow Jones industrial average, Standard & Poor's 500 index and Nasdaq composite all rose by between 1 and 1.3 percent in late morning trading.

Terms of Senate proposal to end US debt crisis

The US Senate has reportedly agreed on a bipartisan deal to raise the debt ceiling and avoid a potential US default. Both chambers of Congress must still vote on the proposal.

The Associated Press reports that the deal includes the following terms:

  • US Treasury will have authority to continue borrowing until February 7, and the Government would reopen until January 15.
  • Lawmakers would be able to vote to disapprove the increase to the debt ceiling, but President Obama would have the right to veto their opposition, ensuring he would prevail.
  • Includes one small concession to the health care reforms known as 'Obamacare'
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