Immediately following its approval in the Senate, President Barack Obama signed a bill Tuesday to raise the nation's multi-trillion-dollar debt ceiling, narrowly avoiding a deadline that could have resulted in the nation's first-ever default.
Moody's, one of the nation's top three credit agencies, said Tuesday that the United States will retain its AAA credit rating now that the debt deal has been signed into law, but there is still risk of a downgrade later on if the nation's fiscal discipline slips.
The bill garnered broad bipartisan support in a 74-26 Senate vote, but led to a split among New York's delegation.
Senator Kirsten Gillibrand voted no, while Senator Charles Schumer voted yes.
Schumer said the bill helps the United States avoid a horrible crisis and that it is time for Congress to get back to work at creating jobs.
"The bill which had things that leader Reid and leader Durbin mentioned had a lot of things we didn't like. It had some things we liked, particularly making sure that no benefits in Medicare, Social Security, and Medicaid were cut," Schumer said.
In a statement, Gillibrand said, in part, "The truth is, today we could have gone further in reducing America’s debt with a sensible compromise that both cut discretionary spending and raised revenues. It is unfortunate Congress missed that opportunity."
The measure allows for a $2.4 trillion increase to the debt ceiling and slashes about $2 trillion from the federal budget.
A bipartisan congressional committee will then meet in the fall to specify ways to further trim the deficit.
It also means Congress does not have to deal with the debt ceiling again until 2013.
Many Republicans said it still does not cut enough spending, while many Democrats slammed the deal because it does not immediately include tax hikes or loophole closures.
Speaking at the White House Tuesday, after the bill was signed without ceremony, Obama said this is just the first step to ensuring the country lives within its means.
He also said lawmakers still need to find a way to reduce the deficit that includes some adjustments to Medicare and reforming the tax code, so the wealthy pay more.
"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, and 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.
Facing a country disgusted by the debt ceiling debate and more than 9 percent unemployment nationwide, the president also announced he is concentrating on jobs and wants money for construction workers and loans for rebuilding roads.
"Because there’s already a quiet crisis going on in the lives of a lot of families, in a lot of communities, all across the country," Obama said.
"We don't believe and the American people don't believe that raising taxes, job-killing tax increases in the middle of this serious recession is a direction we ought to take," said Senate Minority Leader Mitch McConnell, a Republican.
The newly approved debt package also received a negative reaction on Wall Street.
The Dow Jones closed 266 points lower Tuesday, which is a 2.2 percent drop.
The S&P 500 lost 33 points, or a 2.6 percent drop, and the Nasdaq lost 75 points, a 2.8 percent fall.
Critics said the bill increases the deficit without any real means of cutting programs or increasing revenue.
Credit ratings agencies were said to have been looking for about $4 trillion in cuts.
Meanwhile, New Yorkers who spoke with NY1 found little reason to celebrate Congress' debt ceiling deal.
Some say they are concerned about the impact the cuts will have on domestic programs such as Social Security.
"I want Social Security when it's my time. I worry about my kids and the next generation," said one New Yorker.
"Yes we do need to cut spending. We do have to provide a social network, but then again everyone has to pay something," said another.
The House passed the measure by a 269-161 vote Monday, with only two members of the city’s congressional delegation supporting it.
The House vote featured a surprise when Arizona Congresswoman Gabrielle Giffords showed up to vote in favor of the bill.
It was the first time she has been on the House floor since she was shot in the head at an event in Tucson in January.
She was showered with a bipartisan show of support from her colleagues.
In a statement afterwards, Giffords said she could not miss the vote and take the chance her absence might damage the economy.
The above photo is courtesy of the White House press office.