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"
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.