Debt deal brings financial relief - 21 News Now, More Local News for Youngstown, Ohio -

Debt deal brings financial relief

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YOUNGSTOWN, Ohio - There's relief tonight in the financial and economic sectors.

Stocks surged on Wall Street this afternoon after Senate leaders reached a deal that could avoid U.S. default.  The Senate passed the bill 81-18, and sent it to the House, which is expected to take up the bill tonight.

The federal government's bills are piling up, $25 billion in Social Security benefits, $18 billion in Medicare reimbursements, and $12 billion in military pay and veteran's benefits.

But it appears those bills will be paid, now that there's an 11th hour deal with bi-partisan support to raise the debt ceiling, and end the partial government shutdown.

It still has to be approved in both the house and senate.

Nick Demetrios with Hill, Barth & King says, "They expect it to pass through with little resistance just because if we continue to slow, and we end up having to shut down there could be a lot of negative consequences to that."

Despite political differences it seems lawmakers who were divided, were forced to come together, and avoid what could have amounted to an economic disaster.

Dr. Paul Sracic is a YSU Professor and Chairman of the Political Science Department, "You could see things like social security checks being affected, if you don't have the debt limit raised. Unlike the shutdown, that's one of the things everyone's afraid of, because best case scenario is, you don't default on your debt. But you make massive cuts."

"Long term effects it could bring on recession, it could bring on higher unemployment, it could bring on higher interest rates, all those nasty things. The value of the dollar could decline in foreign markets, and those are all things that they've wanted to avoid," Demetrios said.

The White House is urging quick congressional approval, so President Barack Obama can give the deal his signature.

The agreement would reopen the government through January 15th and increase the nation's borrowing authority through February 7th, and that's likely when we'll be going through this all over again.

Dr. Sracic says, "This is the sequester on steroids if you don't have the debt limit raised, but it appears we've dodged that bullet."

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