Another disaster narrowly averted by placing a huge band-aid on it. The Budget Control Act gave the US government more power to spend beyond its means. It’ll immediately raise the debt ceiling another 400 billion, which would tie the government over until September with another increase later to tie over until the next presidential election. It does nothing to cap the deficit, but only attempts to slow down the deficit growth. Cuts in spending will be spread out over 10 years to “match” the increase in the debt ceiling. Bill passed by 269 to 161 vote in House and 74 to 26 vote in Senate.
Meanwhile, DJIA drops 265 points by the end of the day to close at 11,866. Probably a sign that the market fears that the bill will do nothing to prevent a credit downgrade of the US.
Articles:
House passes historic debt deal on eve of deadline
Obama signs debt-limit bill into law
Obama signs debt ceiling bill, ends crisis
Debt Bill:
Debt Bill Cheat Sheet
Budget Control Act of 2011
