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Senate Passes Debt Compromise, President Signs It

The Senate voted 74 to 26 in favor of the debt agreement that was passed by the House on Monday. President Obama signed it into law immediately after the vote, calling it a first step to ensuring the U.S. lives within its means. The plan provides for authority to increase the public debt limit by between $2.1 trillion and $2.4 trillion. It also requires Democrats and Republicans to work together to develop a bigger deficit reducing plan. He says it will have to be a balanced approach with everything on the table, including adjustments to protect certain programs and tax code reform. Obama says that also means getting rid of taxpayer subsidies to oil and gas companies.

Taking an opportunity to highlight the impact of the uncertainty surrounding the debt on the nation's economic recovery, the President has also laid out some of his plans to focus on that when Congress returns from the August recess. He says the first step needs to be extending tax cuts for middle-class families. He also wants them to pass the trade deals with Colombia, Panama and South Korea, which have already been negotiated. He says they would help displaced workers looking for new jobs while allowing U.S. businesses to sell more products.

There were mixed feelings in the Senate about the debt compromise. Senator Mike Johanns, R-Neb., voted in favor of the agreement. Although he would have preferred a long-term plan addressing insolvent entitlement programs, requiring a balanced budget and reforming the tax code, he believes defaulting on the nation's debt would have cost trillions in higher interest rates and more hardship for individual Americans. Senators Chuck Grassley, R-Iowa, and Jerry Moran, R-Kan., voted against the agreementsaying it doesn't offer a solution to the government's out-of-control spending.

Moran says the agreement barely slows the growth of spending even if it is fully enacted. Moran says it will reduce spending by $21 billion next year, but since the U.S. spends $4 billion more than it takes in each day, he says those savings will disappear in less than a week. Grassley agrees and says he voted against the plan because it delays meaningful spending reductions and leaves open the possibility of tax increases, which he says are the wrong answer for a struggling economy.

National Farmers Union President Roger Johnson says he is pleased members of Congress and the White House came to an agreement on the debt ceiling and spending cuts. However, Johnson says many difficult decisions remain in the weeks ahead. NFU and 33 other ag organizations sent a letter to lawmakers and the White House recently asking that agricultural cuts be proportional and that credit be given to agriculture for the $6 billion in reduction it absorbed last year.

As discussions continue for the coming Farm Bill Johnson says it's imperative that U.S. farmers, ranchers and fishermen have a strong safety net they can rely on. NFU hopes any decision to reduce ag spending will provide the Ag Committees with certainty and enough resources to write an effective Farm Bill.