Obama Says Debt Deal Reached, America To Avoid Default, Or "Hank Gave Us A 3 Page Term Sheet; Boehner Gives Us A 7 Slide Powerpoint"

Tyler Durden's picture

In a much anticipated statement, Obama just announced that he has struck a deal with Boehner on the debt and the deficit, which will allow the US to avoid default. And also, as Reuters adds, Obama said that spending cuts included in deal to raise the debt ceiling will not happen so quickly that they will drag on the fragile U.S. economy. In other words, there will be no cuts for the immediate future. But there will be a single $2.4 trillion debt ceiling raise (based on a Joint Committee green light, LOL) just as Obama desired. And of course, there will be no tax hikes. Bottom line: there will be about $40 billion in actual, real spending cuts until the next, $16.7 trillion debt ceiling limit is hit some time in Q1 2013, at which point it will have to be raised to $20+ trillion. But no really, they are cutting spending and all that.

Just as Zero Hedge predicted all along.

Now comes the brief relief rally.

Then comes the hangover.

More from the AP:

Ending a perilous stalemate, President Barack Obama announced agreement Sunday night with Republican congressional leaders on a compromise to avoid the nation's first-ever financial default. The deal would cut more than $2 trillion from federal spending over a decade.


Default "would have had a devastating effect on our economy," Obama said at the White House, relaying the news to the American people and financial markets around the world. He thanked the leaders of both parties.


House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.


No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package.


But leaders in both parties were already beginning the work of rounding up votes.


In a conference call with his rank and file, Boehner said the agreement "isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town."


Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago.


Senate Democratic leader Harry Reid provided the first word of the agreement.


"Sometimes it seems our two sides disagree on almost everything," he said. "But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."

As highlighted in a presentation just released by Boehner, here are the key point of the completed framework:

Emerging framework has three main features:


(1) cuts government spending more than it increases the debt limit;


(2) implements spending caps to restrain future spending;


(3) advances the cause of a Balanced Budget Amendment


Framework accomplishes this without tax hikes, which would destroy jobs, while preventing a job-killing national default.

For those who are interested, Boehner's whopping 7 slides on the proposed deal can be found here.


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anynonmous's picture

all praise to Obama

66Sexy's picture

So... Ater all that, its just a 2.5 trillion debt ceiling raise.

What a bunch of bullshit.

NewThor's picture

ZOMG. can't wait to read this beauty! Anyone wanna guess the # of pages?

hedgeless_horseman's picture

"We are saved!  Praise Obama!"

-The Bankers

Fish Gone Bad's picture

In the future, it will be important to remember who were the debt criminals, and who their fellow conspirators were.  The US is so screwed up they do not even know how screwed they are.

IBelieveInMagic's picture

More likely the rest of the world is more screwed that USA -- we just put out the $ and the rest of world delivers! This elaborate dance was just to show the rest of the world that we take our reserve currency status responsibility very seriously but the outcome was predictable. Let us see if anyone has the balls to challenge this...

bankrupt JPM buy silver's picture

IB raises silver margins tonight.  I encourage everyone to pull their accounts at open.



TruthInSunshine's picture

 Government of the banks & Wall Street, by the banks & Wall Street, for the banks & Wall Street.



redpill's picture

So now it becomes clear that the Republican party establishment would rather cooperate with Democrats than allow the tea party wing to dictate anything.  The One Party is alive and well.


DoChenRollingBearing's picture

Green for you.  In fact, I think I'll just go give ANYONE who has ANY bad thing to say about ANY of our .gov a green.

"Serial Greener" now running through this thread.

FEDbuster's picture

QE 2,800,000,000,000., bitchez!!

"The Federal Reserve has devalued the dollar 97% in just under 100 years, the next 97% devaluation won't take them that long." Dr. Marc Faber 2010

Hasten the Collapse, OBAMA 2012

chalcedonite's picture

What do you mean it is not for the people:  


By the way the origination of the quote was not by Lincoln but by Wycliffe in 1328:

This Bible is for the government of the people, by the people and for the people.

"Wycliffe and his associates defied church tradition by translating the Latin Bible into English, declaring in the preface, “The Bible is for the Government of the People, by the People, and for the People.” In 1382 Wycliffe was condemned as a heretic; in 1409 the Church ordered all copies of his Bible and other writings to be surrendered and burned. Wycliffe so angered the powers of the Church that although he died of natural causes, 44 years after his death the Council of Constance ordered that his bones be dug up and burned at the stake."


falak pema's picture

And for good measure the same council invited Jan Hus, the czech Wycliffe of that age, to Constance as a diversion. The Constance papal conclave held in 1414-1415, a bit like the current Congress in gridlock today, was bickering about who was the real pope. They had a choice between three pretenders : The french pope in Avignon, the Tuscan pope in Pisa supported by the now powerful Medicis family of Florence, and the Roman pope proposed by the germanic holy emperor. As the ecclesiastic conclave was unable to resolve this MAJOR political fight, promoted by three rival political groups, they thought of an  expediency to while away their frustration. They invited Jan Hus to come present his deviant theories to them to DEBATE under safe passage to COnstance and personal protection offered by the Holy Roman Emperor himself, through heir apparent Sigismund of Hungary. Once in COnstance, the clergy immediately put him to trial for heresy, condemned him and burnt him at the stake! That's politics for you!

The papal conclave resolved itself when France lost a major battle at Agincourt that summer and that put an end to french pretentions. The papal seat moved back from Avignon to Rome. A NEW pope, not one of the three intial canditates, was elected and papal presitge and serenity was restored once again in Rome. 

Morality : We need change so that nothing changes!  Remember what Lampedusa said in "the Leopard" ...Keep your eyes on the POTUS and Congress. You'll see that history repeats itself...

chalcedonite's picture

I am wondering if this video I posted is getting watched.  The entire system is a money laundering criminal syndicate organized to take, extract, and monopolize real wealth.  

smlbizman's picture

you know it is full of such bullshit like the 1099 fiasco.....radio frenquency bullshit , probably the rent free foreclosure solution, you know, to help housing...and on and on and.... 

FEDbuster's picture

"Cut, Cap and Balance" replaced with "Spend, More and Borrow".

Hasten the Collapse, OBAMA 2012

Death by a 1,000 increses.

Mike2756's picture

Curious, wonder if the Fed will be forced to defend the currency at some point. The current regime had a chance to do serious infrastructure work and blew it. Are they planning on massive spending before the auto-cuts kick in?

New_Meat's picture

"... had a chance to do serious infrastructure work and blew it."

Au contraire, mon ami.  It was all part of the plan.

- Ned

{Getting sick of watching the boy-Plouffe on the TV yet?}

mickeyman's picture

They just delayed it keeping you all in suspense to the last possible moment so the populi would gratefully accept whatever got shat out.

monkeyboy's picture

An interesting comment that was posted on the MSNBC article by one of the readers in response to another commenter.   



Link: http://politics.newsvine.com/_news/2011/07/29/7198935-obama-announces-debt-agreement#c56519426
======== ======== ======== ======== ========
The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)
It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.

Total annual income for the Jones family: $21,700
Amount of money the Jones family spends: $38,200
Amount of new debt added to the credit card: $16,500
Outstanding current balance on the credit card: $142,710
Amount cut from the current budget: $385
So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. Cut $385 of spending in order to solve $16,500 in deficit spending? Will this work? Hmmmmmmm!

It is a start, although hardly a solution.

Now after years of this, the Jones family owes $142,710 of debt on its credit card, and can barely pay the interest each month.

You would think the Jones family would recognize and address this situation, but it does not! ............... Neither does Congress.

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to "bring home the bacon" to their own home state. Sort of like the "Gimmee Tribe".

To effect budget change, we need to change their job description and give Congress new marching orders.

It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now.

In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.

======== ======== ======== ======== ========

Cursive's picture


Thanks for re-posting.  That's a really good example of the Ponzi we are in.  Man we are screwed.  Nights like this remind me why prepping has become a national pasttime for some.

Id fight Gandhi's picture

But the jones can't print money. USA can.

Id fight Gandhi's picture

Here comes qe3 too.

Why not just put that in th CONstitution now. Free money for the rich and fuck every working person.

DoChenRollingBearing's picture

QE-to-infinity, that's it.

I am appalled that even the Republicans want to destroy our country too.

Getting off the grid, leaving the country (if you have money), buying gold and/or many other things need to be moved to the top of EACH OF OUR to-do lists.

Cognitive Dissonance wrote a timely a piece theree at the top.  Well worth the ffort to read it.  It's our fault too.


-2.7 trillion MORE junks to you .gov.

Cursive's picture


I am appalled that even the Republicans want to destroy our country too.

You know I respect you as a fellow zherohead, but I gotta call bullshit on this Republican love. I don't know, maybe I misread you and you were being sarcastic. Boehner got no concessions and he "capitulated".  I put quotes around the capitulation because his intentions were not sincere.  Oh well, another log on the funeral pyre of a once great and proud nation.

Vic Vinegar's picture

+1 to respect to the old-school.  You are correct Cursive.

 Re: DoChen's comment: It's our fault too...Bull-fucking-shit.  We were born into this dude.

Richardk888's picture

It is our fault.  The American people have stood by and allowed this to happen over the span of the last 100 years.

People should be in the street right now protesting this atrocity that is occupying the three branches of government.

"The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing."
Albert Einstein

 "All tyranny needs to gain a foothold is for people of good conscience to remain silent."                       Thomas Jefferson


KowPie's picture

You can go to the streets and protest until the Kows come home. It would make good soundbites and great fodder for all of the corrupt mass media but that's all it would accomplish at this stage. Take it up a notch with armed insurrection and prepare for your lunchbox to be stuffed with gas grenades and hot lead.

The only solution is to keep feeding the little boy standing on the kitchen chair more rope until he has enough to loop it from his neck over the rafter. And then his playmates will kick the chair out from under him and wonder why the game is suddenly over. They'll keep printing and spending until the raft goes over the edge of the waterfall and won't stop a second sooner, you can "bank" on it.

grey7beard's picture

.>> even the Republicans want to destroy our country too.

As this place is crawling with Republican Party cheerleaders, could one of you please remind me of the last time the Republicans did something good for the country.  Does the Gramm-Leach-Blailey bill ring a bell with any of you folks?

SloMoe's picture

So, all the little girls in Washington DC can go back to playing jacks, and Obama won't miss his tee-off tomorrow. I'll bet he, at least, is relieved...

Translational Lift's picture

Yea....CONgress and the administration just relieved all over the US people...........

GoinFawr's picture

Are you feeling that warm trickle down yet?

KowPie's picture

That's why it's called "GOOberment"

NumNutt's picture

Wouldn't it be funny as hell if this gets defeated in congress due to the lack of democratic support? After all that high five'n by all the leaders, what would Obama say then?

I am a ..'s picture

Wouldn't it be funny as hell if this gets defeated in congress due to the lack of democratic support? After all that high five'n by all the leaders, what would Obama say then?

Still the possibility that the 'Debt Deal' could be a trap.  Bushwhacking coming up at the OK Congress Corral?????

Yen Cross's picture

-44 to +51... Where do I mail the invitations?


                  YEN (DOT)? (: Sarc

razorthin's picture

So the corpse avoids mutilation.  Whew.

Doyle Hargraves's picture

More fresh brains to keep the zombie going...

razorthin's picture

So we go from -$10T to -$15T in 5 years, and we are supposed to be giddy about a $1T reduction over 10 years.  What kinda moron buys into this (literally)?  And holds beyond Tuesday, that is.

Fish Gone Bad's picture

Apparantly a lot of elected debt criminal morons

HoofHearted's picture

I'm that moron! I've bought several gold and silver coins at auction this evening. Prices are better than ever. Nobody wants real money when there will be BennyBux to go around.

buzzsaw99's picture

1) brief relief rally

2) brief bond crash

3) eternal QE

knukles's picture

WHich means business as normal....
Invest as normal.... Gold, silver, non-US dollars, Swissy, TIPS... etc.

DoChenRollingBearing's picture

Gold and silver, yes.

I wish I could hand out more thn one greenie at a time.

Yen Cross's picture

 +1 for the " Hell " of it Buzz...


Bent Nail's picture

One trillion in deficit reduction over 10 years. Pure magic. How did they do it?

CrashisOptimistic's picture

It's not magic.

It's serial backstabs.

Did you see that part about Medicare benefit *providers* are the ones cut, not the benefit recipients?

That's what the AMA gets for supporting Obamacare.

hedgeless_horseman's picture

...and don't forget about those cocksuckers at the MGMA.