Instant view: Debt-limit hike has enough votes to pass

NEW YORK (Reuters) - A measure to cut spending and raise the U.S. debt ceiling to avert an unprecedented default gained enough votes to pass the Senate on Tuesday, as voting continued.

COMMENTS:

SCOTT BROWN, SENIOR ECONOMIST, RAYMOND JAMES, ST. PETERSBURG, FLORIDA

"(The possibility of a downgrade) is still pretty low at this point. I think the rating agencies have to realize the consequences of doing so. And the fact that the U.S. has made some progress in (improving) the long-term budget outlook. I don't think it's likely, but it's not out of the realm of possibility.

"It certainly would have ripple effects through the market. You have a number of entities that are required to invest in AAA assets like money market funds. What are they going to do? Even if it gets downgraded to AA, the U.S. would still be seen as a safe asset.

"It's not just treasuries --- Freddie and Fannie's debt, the states, thousands of municipal securities would be downgraded. The consequences would still be pretty severe."

ASHA BANGALORE, ECONOMIST, NORTHERN TRUST, CHICAGO

"The signing is essential to prevent an induced crisis, but it doesn't address the fundamental problems of the nation. Going forward, we need to address these problems so the economy can get back on its feet.

"With this austerity proposal, it's hard to see how this is favorable for a fragile economy."

MICHAEL MORAN, CHIEF ECONOMIST, DAIWA SECURITIES AMERICA, NEW YORK

"The vote is a positive in that it removes a great deal of uncertainty from the market.

"If you're assessing it as a significant step to reduce the budget deficit, it's not impressive from that perspective. The changes are small and not specific. Future Congresses could sidestep some of the planned cuts. We're still a long way from a sustainable fiscal situation.

"One of the big concerns is the effect on the economy. That is a negative, but not a big negative. The fiscal restraint scheduled for 2012 is modest. There's a chance we could see more substantial cuts in 2013. The long-run budget situation is bad enough that Congress has to focus on that.

"The lesson we have learned is the importance of keeping your fiscal house in order. Because we are overextended, we don't have the flexibility to put fiscal stimulus in place now. We are handcuffed at a time when you would want to be supporting the economy."

TOM BENTZ, DIRECTOR, BNP PARIBAS COMMODITY FUTURES INC IN NEW YORK

"The passing of the US debt ceiling bill should already be priced into oil markets. Not expecting any major fireworks. Markets are more concerned about the recent trend of weaker economic data."