Debt Deal Reached Sunday night
Late Sunday night, the president and congressional leaders reached an agreement to raise the debt ceiling, which they say cuts some spending immediately and uses a “Super Congress” for future cuts. The deal includes $2.4 trillion in deficit reduction over 10 years and a first round of cuts that would total $917 billion.
The next round of $1.5 trillion in cuts would be decided by a committee of 12 lawmakers, six from each party. This “Super Congress” must come up with cuts by Thanksgiving, which the rest of congress cannot amend or filibuster the recommended cuts. If the “Super Congress” cannot agree or fails to enact savings, there is a measure requires automatic cuts worth at least $1.2 trillion. The cuts would be split between military and domestic programs.
However this bill still needs congressional approval and it is not over until the Senate and House vote to pass it. Both the Senate and the House are expected to vote on it today. Senate approval seems likely, but the outcome in the House is less certain.
How does this affect you? If passed, this deal will spare Social Security, Medicaid and programs for the poor. However, Medicare providers, not beneficiaries, will take a hit. There also won’t be an extension of unemployment benefits as part of the final package, which the Obama administration originally wanted. There were also no tax increases for those making over $250,000 annually included in the deal.
Even with a deal, there is still no guarantee that the United States’ perfect credit rating will remain. As a country, the U.S. currently has a perfect AAA credit rating,and a cut in the rating could lead to higher borrowing costs for the U.S. and possible other financial issues. (CNN)
[...] In case you’re still wondering how the debt ceiling agreement affects you, check our guide. [...]