by Vittorio Hernandez

Washington, D.C.

Despite the 11th hour approval by Republican and Democratic leaders of a deal that would increase the U.S. debt limit by $2.4 trillion from the current $14.3 trillion, observers said the prolonged deadlock still caused political damage to the nation.

Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota, said the impasse caused lasting political consequences that he forecast would be wide-ranging. He forecast that one of its impacts would be a political hurricane in the 2012 elections.

Tom Davis, former chair of the National Republican Congressional Committee and ex-Virginia congressman, said the debt ceiling did not address the biggest concerns of Americans, which are persistent high unemployment and frozen wages.

The deal will be voted on by the House and Senate on Monday. Now the job of party leaders is to convince their members to vote in favor of the agreement.

President Barack Obama, who announced a debt agreement had been reached on Sunday night, described the deal as a compromise that would made a serious down payment on the deficit reduction that the U.S. needs and would avoid default. The deal was crafted barely two days to the Aug. 2 deadline.

The package would reduce spending by $917 billion spread over 10 years, raise the debt limit initially by $900 billion and assign a special congressional committee that would seek another $1.5-trillion in deficit savings by late November.

House Speaker John Boehner said it is not the greatest deal in the world, but expressed hope that Congress would approve the package.

The three major ratings agencies have previously warned that even if Washington beat the deadline, there are still chances that the U.S. would suffer a credit rating downgrade from its current AAA rating.

 

 

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Despite Debt Deal, Prolonged Deadlock Caused Political Damage | Politics

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