Forex News – U.S. Debt limit vote is underway in the House of Representatives

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The U.S. House of Representatives is set to vote on House Speaker John Boehner’s debt plan this evening, after being postponed from Wednesday’s scheduled meeting.

Republican House Speaker John Boehner tried to shore up support among fellow Republicans for his plan to raise the debt ceiling after revising his draft bill to cut $917 billion over 10 years. His first draft was criticized for falling short in budget cuts.

Meanwhile, all 51 Senate Democrats and two independents signed a letter yesterday pledging to oppose Boehner’s plan.

This is increasing nervousness in the markets as the U.S. government has less than a week before a potential default on Aug. 2.

Democrats and Republicans have failed to reach a compromise so far on a budget plan to cut the deficit. The two parties are wrangling over the Republican’s (Boehner’s) two step plan which would call for a second debt-limit vote tied to another $1.8 trillion in budget cuts that likely would come early next year, just as 2012 election campaigns are gearing up.

Democrats refuse the plan citing they do not want to go through the same painful process of approving a budget plan for the second time. Democrat Senator Harry Reid proposes in his plan to extend the debt ceiling until 2013 while making $2.2 trillion in total spending cuts, including $1 trillion from winding down the Iraq and Afghanistan wars.

The focus is now on the vote results due out later this evening.