WASHINGTON, Aug. 2 (UPI) -- President Obama signed into law Tuesday legislation raising the United States' debt limit and reducing the federal deficit.
"[The] president has signed the bill and turned it into law," White House spokesman Jay Carney said during the daily briefing.
The Senate passed the compromise measure Tuesday on a 74-26 vote. The bill cleared the House of Representatives Monday on a 269-161 tally.
Now that the U.S. Congress has removed the threat of default, it's time for the next phase of the deficit reduction process, Obama said after the Senate OKd the measure.
"Congress has now approved a compromise to reduce the deficit and avert a default that would have devastated our economy," Obama said soon after the Senate passed the bill.
"This is, however, just the first step. This compromise requires that both parties work together on a larger plan to cut the deficit, which is important for the long-term health of our economy."
The measure gives the U.S. Treasury an immediate $400 billion in additional borrowing authority. The plan raises the $14.3 trillion debt limit $2.1 trillion to $2.4 trillion in three steps. Another $500 billion would be available in the fall, unless two-thirds of both chambers vote to prevent it, and a final increase would come early next year, giving the U.S. Treasury enough borrowing power to pay bills into early 2013.
The measure would cut $917 billion in spending over 10 years, starting with $21 billion in the fiscal year starting in October. The bill also creates a congressional committee charged with closing the deficit an additional $1.2 trillion to $1.5 trillion. If the panel deadlocks or Congress doesn't accept its plan, a prearranged set of spending cuts would kick in, including steep cuts to defense and entitlement programs poised as a guillotine to prod the committee and Congress to act.
"Since you can't close the deficit with just spending cuts, we'll need a balanced approach where everything's on the table," Obama said, laying down a gauntlet for Republicans. "Yes, that means making some adjustments to protect healthcare programs like Medicare so they're there for future generations. It also means reforming our tax code so that the wealthiest Americans and biggest corporations pay their fair share."
It also means eliminating taxpayer subsidies and closing tax loopholes, he said.
"I've said it before, I will say it again: We can't balance the budget on the backs of the very people who have borne the biggest brunt of this recession," Obama said. "Everyone's going to have to chip in. That's only fair. That's the principle I'll be fighting for during the next phase of this process."
Before approved the debt ceiling compromise, senators gave impassioned speeches for or against the measure.
"This bill does begin the process of changing behavior," Sen. Roy Blount, R-Mo., said during debate leading up to the vote.
Recalling a sentiment observed by a former senator, Blount said the bill "is not the best possible bill, but it's the best bill possible."
"This bill does not solve the problem, but it at least forces Washington to admit that it has one," Senate Minority Leader Mitch McConnell said. "And it puts us on a path of recovery … in restoring balance. We have changed the debate; we have headed in right direction."
While the world witnessed a "lot of political wrangling" during the past few weeks, observers also saw lawmakers reach a historic decision, Senate Majority Harry Reid said.
"The product we have here is one of compromise," Reid, D-Nev., said. "There's principally one winner here and that's the American people."
Sen. Orrin Hatch, R-Utah, said he couldn't support the bill, even though it had several aspects "conservatives could hang their hats on."
Hatch said the threat of a downgrade in the United States' credit rating "comes from a failure of will."
Obama "needs to accept responsibility for an economy that has worsened under his leadership," Sen. Rand Paul, R-Ky., said when announcing he would vote no.
Paul said the nation wouldn't go into default Tuesday, but it would default in "a more insidious" manner later because the dollar would be devalued as more money is needed to repay the U.S. debt.
The debate is "about the future of our country. It's about saving ourselves from ourselves," he said.
Reid said he hoped the spirit of compromise would extend beyond the past few days.
"It's time for Congress to get back to the people's business," Reid said, "There's nothing more important than that."