Debt ceiling countdown: Obama confirms deal is set
WASHINGTON (BDCi) – President Obama gave a national address Sunday night confirming that a deal to raise the national debt ceiling has been struck between Democrat and Republican congressional leaders, and will be voted on Monday.
Terms of the accord call for the debt ceiling to be raised $2.4 trillion through early 2013 while the same amount would be saved over 10 years in cost reductions that would be triggered in two stages. The first stage would see $900 billion of cuts that were broadly agreed to in these negotiations between the two parties.
The second batch of reductions -$1.5 trillion – would be recommended by a special committee to be named later, and if that committee’s suggestions were not agreed to, then an automatic reduction mechanism would be put in place.
Even though a framework has been agreed to by the leaders, there will be time for the rank and file of each house of congress to pick at it before the vote Monday. Much focus will be on House members who have affiliated themselves with the Tea Party who want government to balance their budgets.
The U.S. must raise its debt ceiling by August 2nd (Tuesday, midnight) or else it will not be able to borrow to pay all of its bills. The Treasury department will have to report what bills will be paid, and which ones won’t be, which could put us in default.
By Don Weinstein
1 August 2011
12:38 a.m. P.D.T.