Power Breakfast: Debt compromise reached, improving neighborhood value, AFLAC, Clayton schools, fuel

There is no bigger news today than the deal on the debt ceiling.

Ending a perilous stalemate, President Barack Obama and congressional leaders announced historic agreement Sunday night on emergency legislation to avert the nation’s first-ever financial default, Associated Press reports.

The dramatic resolution lifted a cloud that had threatened the still-fragile economic recovery at home — and it instantly powered a rise in financial markets overseas, AP writes.

The agreement would slice at least $2.4 trillion from federal spending over a decade, AP reports. The Treasury’s authority to borrow would be extended beyond the 2012 elections, a key objective for Obama, though the president had to give up his insistence on raising taxes on wealthy Americans to reduce deficits.

The plan calls for spending cuts and increased borrowing authority for the Treasury in two stages, AP reports.

In the first, passage of the legislation would trigger $1.2 trillion in spending cuts over a decade as well as a $900 billion increase in the government’s borrowing authority. The spending cuts would come from hundreds of federal programs across the face of government.

In the second stage, a newly created joint committee of Congress would be charged with recommending $1.5 trillion in deficit reductions by the end of November and put to a vote in Congress by year’s end, AP writes. The cuts could come from benefit programs such as Medicare, Social Security of Medicaid as well as from an overhaul of the tax code.

The committee proposals could trigger a debt limit increase of as much as $1.5 trillion, if approved by Congress. But if they do not materialize, automatic spending cuts would be applied across government to trim spending by $1.2 trillion, AP writes.

Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare, AP reports.

Also in the AJC:

In other media:

- Henry Unger, The Biz Beat

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6 comments Add your comment

Obama

August 1st, 2011
6:22 am

How is Hope and Change working out for you?

Local Yocal

August 1st, 2011
6:41 am

Mr. Obama, fool me once, shame on you, fool me twice, shame on me.

You won’t be receiving my vote in 2012.

Might as well vote Republican, what difference does it make? We’re involved in more wars and we have fewer social programs than we did under George W. Bush.

At Least Kiss Me First

August 1st, 2011
6:43 am

Come on 2012! That’s some change I’m looking forward to.

James

August 1st, 2011
7:21 am

What we have here is a white elephant just giving birth to a mouse. This just slows the bleeding for the time being until after the election; it doesn’t exempt the need to look at real reductions in spending, because you can’t pay bills with money you don’t have.

borrow more!

August 1st, 2011
9:44 am

Borrow more trillions–what a “deal!” YES!!!!

art Thomas

August 1st, 2011
3:16 pm

The Democrats and President have added 4 trillion in deficit spending since the election was stolen in 2008. They now want to reduce over 10 years 3 trillion.. How many sheep are you trying to fleece.? The Us is 100% broke and has been financed by China which has used our practically worthless dollar to build their military and infrastructure forces. They are entirely debt free while our country and sheep leaders have squandered trillions for nothing. The government needs to eliminate the 500,000( mostly black and brown minority ) hired since 2008 cut all foreign subsidies (who cares about Libya)reduce military by 1/2 now bring our men and woman home and honor Social security and medicare as these recipients paid their share.

Eliminate all illegal alien support and turn this ship around now or complete outflow of business and individual savings will further deplete the financial strength of this former fiscal power and we will be quickly swallowed into chaos . 40% joblessness and utter ruin.