Just hours ahead of a deadline to avert an unprecedented U.S. default, Congress approves a bill that raises the $14.3 trillion debt ceiling and sets in motion a plan to reduce U.S. deficits over 10 years.

* The Democratic-led Senate approves the deal on a 74-26 vote on Tuesday and rushes it to President Barack Obama for his signature.

* Obama plans to sign the bill without ceremony as soon as it arrives at the White House. Obama says the debt and deficit bill is an important first step to make sure the United States lives within its means. Obama says a balanced approach between spending cuts and tax increases is needed.

* Senate action comes after the Republican-led House of Representatives approved it on Monday night on a bipartisan vote of 269-161.

* U.S. Treasury Secretary Timothy Geithner tells ABC News that the contentious battle over the debt limit and the threat of default had damaged confidence in the economy and that credit rating agencies would take a careful look at whether lawmakers have the will to reduce deficits.

* Despite the deal that will increase government borrowing authority through the 2012 presidential election year, Wall Street still worries about a possible downgrade of the U.S. AAA credit rating. U.S. stock indices open lower on Tuesday.

(Reporting by Donna Smith; editing by Jackie Frank)