Lawmakers pushing last minute debt deal

Reuters: By Andy Sullivan and Laura MacInnis

WASHINGTON (Reuters) – Congressional leaders rushed to line up Republican and Democratic votes on Monday for a White House-backed deal to raise the U.S. borrowing limit and avert an unprecedented debt default.

With scars still fresh from the months-long brawl over increasing the $14.3 trillion debt ceiling, a new fight was shaping over the incendiary topic of taxes.

Global markets showed signs of relief that the United States appeared to be dodging default, but fears that the country might still lose its triple-A credit rating even with a debt deal contributed to a fizzle in a brief stocks rally.

“We avoided the possibility of a default, but now concerns are turning to a possible downgrade,” said Phil Streible, senior market strategist with futures broker Lind-Waldock in Chicago.

Votes were expected later in the day in the House of Representatives and Senate on a plan to cut at least $2.4 trillion over 10 years, form a powerful new congressional committee to recommend a deficit-reduction package by late November, and raise the U.S. borrowing limit through 2013.

The non-partisan Congressional Budget Office confirmed that the debt deal would reduce budget deficits by at least $2.1 trillion over 10 years.

U.S. lawmakers split into Democratic and Republicans camps to hear appeals from their party leaders to approve the deal which emerged from feverish negotiations as the clock ticked toward a Tuesday deadline. Party leaders are hoping for sizable majorities in order to give the deal credibility.