Gannett’s Washington Bureau reports that while Congress moved today toward a short-term deal to reopen the federal government and raise the debt ceiling, economists and business leaders are warning that the pattern of governing through brinksmanship is hurting economic growth.
Senate Majority Leader Harry Reid, a Nevada Democrat, announced a short-term bipartisan deal that would fund federal agencies through Jan. 15 and suspend the debt ceiling through Feb. 7. Negotiators for the House of Representatives and Senate would be required to recommend a long-term budget plan by Dec. 13.
The House and Senate are expected to vote on the agreement later today.
That doesn’t mean that the U.S. economy is in the clear. The Fitch credit rating agency yesterday placed the U.S. government’s AAA rating on a “rating watch negative.”
“Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,” the Moody’s Analytics, said the debt crisis that threatened a debt default could have created “a deep dark recession” on a par with the Great Recession by the end of next month, Gannett’s Washington Bureau reports.
Larry Fink, chairman and chief executive officer of the world’s largest money manager, BlackRock Inc., said in an interview on “CBS This Morning’’ that the latest Washington crisis has had a huge effect on job creation because CEOs are holding back.
“They’re not going to invest in plants and equipment,’’ Fink said. “They’re going to hold back. And so here we are. We have a very, you know, unquestionably poor job economy, and we’re only going to make it worse.”
(Associated Press file photo.)