WASHINGTON — Congress was poised to send President Obamaa compromise deficit-reduction package topping $2 trillion Tuesday, just hours before the nation could run out of borrowed money to pay its bills.

After months of bitter partisan wrangling, the House on Monday easily approved the landmark measure raising the nation's $14.3 trillion debt limit by a 269-161 vote. The Senate is expected to approve it at noon Tuesday, and Obama is prepared to sign it almost immediately, averting the prospect of an unprecedented default.

The carefully crafted compromise was swept through the House by lawmakers who wanted to sidestep a fiscal calamity that has spooked stock markets, miffed foreign investors and threatened the nation's triple-A bond rating. The Dow Jones industrial average rallied early Monday, but closed down 11 points.

"This is a down payment on the problem," said House Budget Committee Chairman Paul Ryan, R-Wis. "It's a good step in the right direction. And it is a huge cultural change to this institution."

The deal achieves two major goals sought by Obama and congressional leaders: staged increases in the debt ceiling that will extend past the 2012 elections and a first step toward cutting annual deficits that have topped $1 trillion three years in a row.

It also leaves out what each political party most wanted to avoid: tax hikes sought by Obama but opposed by Republicans, and major cuts in entitlement programs such as Medicare and Social Securitythat were opposed by Democrats.

As a result, White Housepress secretary Jay Carneyacknowledged that "the can is kicked a little bit down the road" on those major issues, which are likely to play an outsized role in next year's presidential and congressional elections. Obama, congressional leaders and outside commissions had sought to cut deficits by $4 trillion or more over 10 years; the deal includes only a tenuous promise to seek half that much.

About $900 billion would be cut over 10 years through spending caps. Another $1.5 trillion would be sought this fall by a special committee with unique power to force congressional action. If it fails to reach that goal, spending could be cut by $1.2 trillion automatically, divided equally between defense and domestic programs.

The White House and congressional leaders lobbied for votes all day Monday from recalcitrant lawmakers.

The office of House Majority Whip Kevin McCarthy, R-Calif., sent an alert to GOPlawmakers detailing the support of business and anti-tax groups. House Speaker John Boehner pressed defenders of defense spending to support Pentagon cuts.

Republican leaders boasted that they got two-thirds of the spending cuts they sought, leading GOP House members to vote 174-66 in favor of the bill. Democrats who split 95-95 on the measure were left to highlight the cuts they averted.

That wasn't enough to please liberals such as Rep. Lynn Woolsey, D-Calif. "I can't believe something as routine as the debt ceiling is being used to extort $2.5 trillion in cuts to investments Americans need," she said.

Advocates of slashing budget deficits called it a small but significant step in the right direction — even though the nation's debt would continue to soar past $20 trillion over the next decade.

"The agreement represents a very modest first step on what will be a long and difficult road to restore fiscal sanity," said former U.S. comptroller general David Walker.

Source: http://www.usatoday.com/news/washington/2011-08-01-Senate-vote-debt-obama_n.htm

Also published in the Detroit Free Press: http://www.freep.com/article/20110802/NEWS07/108020374/Debt-limit-compromise-House-says-yes-debt-deal-Giffords-makes-surprise-return?odyssey=tab|topnews|text|FRONTPAGE