Eureka! At the 11th hour, a deal to raise the debt ceiling and avoid financial default was reached by both houses of congress — well, almost.
In a late Sunday night speech and only moments before the Tokyo stock market was set to open, President Obama announced that congress had agreed to a deal that would raise the debt ceiling, reduce the deficit and avoid sending the United States into default for the first time in its history. The agreement was made in principle, as it was primarily designed to buy more time. But the president cautioned, “We are not done yet.”
As of this writing, the intricate details of the agreement were sketchy and still unfolding. What is known so far is the debt ceiling will be raised through February of 2012, which gives the U.S. the means to pay its creditors (China) and continue making domestic payments including social security and unemployment benefits. A to-be-determined bipartisan commission will be created to define the fine print of the deal and determine where to make budget cuts and how to increase revenues.
The Australian markets opened up 1.5 points amidst the news, while the Tokyo markets were up 2 points. But in spite of the early euphoria, both houses of congress still must vote and approve the makeshift deal. Democratic and Republican leaders believe they have the votes to push the deal through to the president’s desk for his signature, but liberal Democrats and Tea Party conservatives are already balking at the deal and what it might mean for them politically.
So at this point, it is pretty much a done deal that the United States will avoid default. But how it goes forward regarding spending habits and revenue intake (higher taxes?) is still yet to be determined. Stay tuned!
I knew they would find a way to work it out at the last minute but they still look like a bunch of wining babies. I just took the poll and I'm sorry but I think everybody take a political hit on this one. Gonna hurt the Repubs more though in election year.