What Happens When a Debt Ceiling Deal is Agreed to?

by Pejman Yousefzadeh on August 1, 2011

This:

Relief around the world was indisputable, with Asian shares on Monday enjoying one of the best sessions in weeks. The advance continued in Europe, and Wall Street was set for a solid opening — both the Dow futures and the broader S&P 500 futures were 1.2 percent higher.

Just an indication of how powerful, and how consequential the United States economy is, not to mention how important it is for economic and political leaders to act prudently and responsibly. Imagine the chaos that would occur in markets if a debt ceiling bill were not agreed to.

Not that there aren’t people trying to sink the deal:

Passage seemed likely if not wholly assured. Support from Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., should guarantee Senate approval, but the House could prove more difficult because of defections from left and right alike.

“This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” said Rep. Raul Grijalva, D-Ariz.

Tea party favorite and presidential candidate Michele Bachmann, R-Minn., countered that the deal “spends too much and doesn’t cut enough. … Someone has to say no. I will.”

More in this vein:

There were indications the deal had found sufficient backing from Senate Democrats. But it still lacked support among the most liberal Democrats and conservative, tea party-backed Republicans in the House of Representatives.

Pelosi said she would be meeting with House Democrats about the compromise measure on Monday.

“We all may not be able to support it or none of us may be able to support it,” Pelosi said, indicating Democrats would want to study the plan.

No one should think for a moment that this drama is over. This deal could still go down. And if it does, there will be no time to make another deal before the August 2nd deadline.

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