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August 1, 2011 - Full Episode | Nightly Business Report | PBS

Nightly Business Report for August 1, 2011 - Full EpisodeRead full text transcript: Monday, August 01, 2011 Debt Deal Returns to CongressTOM HUDSON, NIGHTLY BUSINESS REPORT ANCHOR: And there's one day left, after weeks of bickering here, Susie, it is shaping up to be another awfully busy night in Washington. The U.S. House of Representatives is debating the measure now and is expected to start voting on a debt ceiling issue any moment now. SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: It's another one of those nail-biters, Tom. And if the bill passes the House, as expected, the measure heads to a Senate vote tonight and could land on President Obama's desk as early as tomorrow morning. HUDSON: Now the bill calls for raising America's debt ceiling by $2.4 trillion by the end of next year and cutting nearly $2.5 trillion in government spending in two steps. Our Washington bureau chief Darren Gersh joins us live now from the Capitol with the latest -- Darren.DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Yes, hey, Tom, you know, the House is about to go through some procedural votes and get down to the business of finally passing this. And then the Senate is expected to follow as soon as tonight or tomorrow. So we're going down to the wire. Congressional leaders spent most the day selling the debt limit package to the last holdouts. REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: My goal is to get this bill passed, signed into law, to solve this debt crisis, and help get the American people back to work. GERSH: Many Democrats lashed out at the bill for cutting spending without raising revenues. A defensive White House tried to put the best face on an agreement that many Democrats felt fell far short of the president's goals. JAY CARNEY, WHITE HOUSE PRESS SECRETARY: In the end, compromise won out and an agreement that we believe strongly is in the interests of the American people was achieved. GERSH: The agreement now sets the stage for non-stop budget battles. In the next few months, law-makers will begin to wrangle over where to find $756 billion in specific program cuts needed to meet the new budget caps. After that, attention will turn to a bipartisan "super committee" charged with producing another $1.5 trillion in spending cuts and revenue increases. Expectations in and outside of Congress are low that law-makers will succeed in doing in November what they couldn't do this summer. ANDY LAPERRIERE, POLITICAL ECONOMIST, ISI GROUP: The early feedback that I hear from people on Capitol Hill is that it probably won't agree to anything like that in the second round. GERSH: That would mean Republicans and Democrats will spend 2012, a big election year, arguing whether to raise taxes and how to reform Medicare and Social Security. The showdown comes in 2013, when the debt limit agreement calls for automatic cuts in defense and Medicare at the same time the Bush tax cuts expire. LAPERRIERE: 2013 was always going to be the big battle to settle these cosmic questions of how much we are going to have to change entitlements, how much we are going to have to raise revenue. GERSH: In the meantime, a debt limit agreement makes it less likely Congress will extend the payroll tax cut that is scheduled to expire at the end of the year or provide any additional stimulus to the economy. It does, however, eliminate some near-term uncertainty over a default and reduces the threat of repeated government shut-downs. But the key uncertainty over the federal government's fiscal outlook remains. UNIDENTIFIED MALE: Our problem really isn't the current deficit, it's that we have no rules in place that sends the deficit assuredly down quickly enough that we don't accumulate even more debt at an increasing pace. GERSH: So, Tom, I hate to tell you this, but that means that the really hard work, it's still ahead. HUDSON: Like we haven't done a lot of hard work already, Darren. Let's break this down though. What do we know where the first round of cuts will be made to spending? GERSH: I think a lot of people will be surprised given all of the anxiety that has come about so far, but the immediate cuts in 2012 are going to be about $25 billion out of a spending category in the budget that's about $1.2 trillion. Now part of that is by design, they didn't want to hit the economy real hard with cuts right away, but it also shows you how hard it is to cut the budget. Read full text transcript:
Length: 24:36


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