Update on Debt Ceiling

Voting is underway in Washington DC on the deal that was struck late last night on raising the debt ceiling.  McBee Strategic has provided this detailed analysis and below are a few more notable points to be aware of.

• President Obama reached an agreement with Congressional leaders last night on a multi-step deficit-reduction package expected to total $2.4 trillion over 10 years, to be accompanied by nearly matching increases to the debt limit.

• Last night’s agreement makes it almost certain the U.S. will not default this week. However, it’s not yet clear the U.S. can preserve its AAA credit-rating since $2.4 trillion falls well short of the $4 trillion standard cited by Standard & Poor’s.

• Spending cuts will be historic if not unprecedented, and the battle will continue likely throughout the 2012 election cycle; no tax increases; at least $2.1 trillion in debt ceiling headroom; requires defense to shoulder a large part of spending cuts.