Will the US default on the debt? The answer is and has always been no. Why all the political theater? I think they wanted to show the public that they are doing something. The problem is we all know they are crooked and friends of banksters. They have not done their jobs and all of them need to be voted out again.
As I have already blogged about, whether they raised the debt limit or not, the US would not have defaulted. Now we have confirmation the deal is done, but unfortunately our problems will continue to get worse.
USA Today:
The deal reached by Democratic and Republican leaders in Congress, Obama said, 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, which would trigger a drop in the nation’s AAA credit rating and force interest rates up for all types of consumer loans.
Obama’s announcement followed brief speeches by Sens. Harry Reid of Nevada and Mitch McConnell of Kentucky, the Senate’s Democratic and Republican leaders, that a “framework” had been reached. “We’re moving forward and we’re moving forward together,” Reid said.
House Speaker John Boehner, R-Ohio, told House Republicans about the deal and his support for it in a conference call. “Now listen, this isn’t the greatest deal in the world,” Boehner said. “But it shows how much we’ve changed the terms of the debate in this town.”
If approved by Congress, the deal will increase the nation’s debt ceiling by at least $2.1 trillion overall while cutting about that much in government spending over the next 10 years, Obama and congressional leaders said. The debt ceiling would not need to be raised again until 2013. Other elements include:
•The creation by Congress of a committee to develop other debt reductions, including tax reform as well as changes to entitlement programs such as Medicare and Social Security. The committee would be required to report back by Nov. 23. The panel would be charged with reducing the debt by another $1.4 trillion over 10 years.
•A second debt ceiling increase of up to $1.4 trillion. Congress reserves the right to disapprove of the second debt-ceiling increase, but the president can veto such an action.
•Votes in the House and Senate on a balanced-budget amendment if the committee can’t reach an agreement, or if Congress rejects its recommendations.
•If the committee fails to reach an agreement, automatic spending cuts split 50/50 between domestic and defense spending will kick in starting in 2013.
•Automatic cuts — the enforcement mechanisms at the heart of the talks — would fall on programs important to both Republicans (defense cuts) and Democrats (health spending). Any potential Medicare cutbacks would affect providers, not beneficaries.
Neither Obama nor congressional Republicans called the agreement ideal.
Obama said he wanted more revenues from eliminating tax subsidies for corporations and by raising tax rates for Americans making more than $200,000. He said he would push for the special committee to make those changes.
The most reserved reaction to the deal came from House Minority Leader Nancy Pelosi, D-Calif., who said she wasn’t sure about support among House Democrats. “We all may not be able to support it, or none of us may be able to support it but we’ll wait and see,” she said.
Early reaction from some House Democrats was sharply negative “This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” said Arizona Democratic Rep. Raul Grijalva, co-chairman of the House Progressive Caucus.
Anna Kournikova
Hayden Panettiere
Cameron Diaz
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