US Debt Ceiling Agreement Reached – or Has It?

Finally! Great news with the announcement Sunday night of a deal to raise the US Debt Ceiling. That sounds good on the face of it but let’s hope the Democrats and Republicans who need to reach agreement together are good hurdlers – they will need to be to get over the obstacles to put the “framework” into legislative language and pass it through both chambers of Congress. And they have roughly 2 and half days to do just that. Let’s just say on their track record of getting legislation passed a snail could go faster. So it will be historic when this happens in more ways than one!

 Here are a few of the hurdles that need to be overcome:

In the House, Speaker John A Boehner told members he would bring legislation to the House floor ‘as soon as possible’ – that’s a bit like saying ‘I’ll do my best, but don’t blame me if we don’t get it done’, or’ I will use my best endeavors to get the job done’.

Not to be outdone, Senator Harry Reid said although the Senate would reconvene at 11am he was unclear if the chamber could vote on the final package that quickly as usually the only way for the Senate to move is if there are no objections from any senators. And pigs fly backwards from Dubbo – or Washington in this case!

And of course President Obama has to sign any legislation finally  passed by both chambers. One thing IS clear – he WOULD do that immediately!

But I can hear you asking “What actually is the ‘Deal’?

President Barack Obama says a deal has been reached to raise the government’s debt ceiling and avoid a default. He said the deal includes more than $2 trillion in gradual spending cuts and no initial cuts to Social Security and Medicare.

The deal reached by Democratic and Republican leaders in Congress, would first cut nearly $1 trillion in spending over the next 10 years while raising the debt ceiling by the same amount.

Congress must approve the deal and Obama must sign it by 11:59 p.m. Tuesday to stop the U.S. government from defaulting on its debts. Failure to do so would trigger a drop in the nation’s AAA credit rating and force interest rates up for all types of consumer loans. Bad news for everyone and not just in the US.

Just remember the devil is in the detail…