Will the U.S. Default? - page 3
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It is an endless loop - solutions are not found and rising the debt ceiling is just "filling in the holes" : not a solution
Senators reach bipartisan debt, budget deal
Senators on Wednesday reached agreement on a deal to reopen the government and lift the U.S. debt ceiling, according to a Senate Democrat aide. Senate leaders agreed on a plan to fund the federal government through Jan. 15, lift the debt ceiling through Feb. 7, and set up a committee to hammer out broader budget issues. The agreement sets a Dec. 13 deadline for a report on a wide budget plan. The Senate and House still need to vote on the agreement.
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Congress Set to End Fiscal Impasse as Boehner Concedes
Congress is poised to end the 16-day government shutdown and raise the U.S. debt limit after the leaders of the Senate reached a bipartisan agreement to end the nation’s fiscal impasse.
The Senate is scheduled to vote at 5:30 p.m., said a Democratic aide on condition of anonymity. The House plans to vote on the deal later today, and the White House press secretary said President Barack Obama supports the agreement.
House Speaker John Boehner said in a statement that Republicans won’t block the compromise.
“We fought the good fight,” Boehner, a Republican, said today on WLW, a radio station in his home state of Ohio. “We just didn’t win.”
The deal concludes a four-week fiscal standoff that began with Republicans demanding defunding of Obama’s 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in the agreement.
“This is far less than many of us had hoped for, frankly, but it’s far better than what some had sought,” said Mitch McConnell, the Senate minority leader, who said the measure retains Republican-preferred spending levels.
The framework negotiated by Majority Leader Harry Reid and McConnell would fund the government at those Republican-backed levels through Jan. 15, 2014, and suspend the debt limit until Feb. 7, setting up another round of confrontations then.
“This agreement achieves what is necessary,” said Jay Carney, the White House press secretary.
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US government open for business for the next 3 months – huge damage done
The final step to reopen the government and avoid hitting the debt ceiling was made by US President Barrack Obama, that signed the legislation passed in both houses of Congress. It came as the date turned to October 17th -the debt ceiling deadline. Politicians did what they always do: cut a deal in the last moment.
After the initial rise, the dollar began retreating and the trend continues. A lot of damage has been done to the US, especially in terms of confidence. With a new crisis scheduled in early 2014, it’s hard to see how the economy breaks away from the slow growth pattern, and how fast the Fed ends QE.
After 16 days of shutdown, the government is open for business for almost 3 months, until January 15th. This is also when the second round of the infamous “sequester” kicks in. A committee including members of both the House and the Senate will try to reach a budget.
The dreaded debt ceiling has been extended to February 7th, with a potential to use “special measures” and to avoid a default until March. Given past experience, it’s hard to see how politicians resolve the problems ahead of time, especially with the Christmas / New Year’s holidays.
There are still no dates for the release of all the pending economic indicators, including the all-important Non-Farm Payrolls.
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We are going to see all this again in just 3 months. Are we going to have a "time between default danger" and a time "when default is hanging over our heads" now?