Obama, Congress reach a debt deal

DAVID ESPO - AP Special Correspondent
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In this photo taken July 22, 2011, President Barack Obama makes a statement in the Brady Briefing Room at the White House in Washington on the break down of debt ceiling talks. "We might as well do it now," Obama admonished, urging Congress to buckle down to the task. "Pull off the Band-Aid, eat our peas." he said in an apt metaphor, one in a spiral of rhetorical one-upmanship that has had all sides stretching for new analogies and catchy one-liners to sway public opinion. (AP Photo/Manuel Balce Ceneta)

WASHINGTON (AP) — Ending a perilous stalemate, President Barack Obama announced agreement Sunday night with Republican congressional leaders on a compromise to avoid the nation's first-ever financial default. The deal would cut more than $2 trillion from federal spending over a decade.

Default "would have had a devastating effect on our economy," Obama said at the White House, relaying the news to the American people and financial markets around the world. He thanked the leaders of both parties.

House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.

No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package.

But leaders in both parties were already beginning the work of rounding up votes.

In a conference call with his rank and file, Boehner said the agreement "isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town."

Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago.

Senate Democratic leader Harry Reid provided the first word of the agreement.

"Sometimes it seems our two sides disagree on almost everything," he said. "But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."