What does the debt ceiling deal mean for Americans? - KWWL - Eastern Iowa Breaking News, Weather, Closings

What does the debt ceiling deal mean for Americans?

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With a "yes" vote from the Senate, and a signature from the President, the nation breathed a collective sigh of relief Tuesday afternoon. But many folks are still asking, what exactly is the debt ceiling deal, and why are we on a deadline?

"What interest do we have in raising the debt ceiling? What that is, is our reputation," said financial expert Dave Becker. "We can say, we've never defaulted on our payment. We've never been late on our payments. And that holds a lot of water with folks, for sure."

Raising the debt ceiling is, essentially, like heading down to your local bank and asking them to raise your credit limit. Except, in this case, the government is playing your role, and the role of the banker. Tuesday afternoon, lawmakers upped our credit limit, so now, we can borrow as much as $16.7 trillion, mainly from other countries like China.

"China is like VISA," Becker commented.

A "yes" vote was necessary to keep the government running. But after weeks of debate, did lawmakers accomplish what they set out to do? Financial experts say, no.

"It is something that, you look at the outcome and you say, really? This is what you came up with? And it seems pretty disappointing," said Becker.

It appears the U.S. will keep its AAA credit rating. At least, for now. But experts say, the government only did the bare minimum to keep afloat, and that may not be enough.

"In spite of having a debt deal put through, I think the ratings agencies are going to come back and say, yeah, but it's not anywhere near enough," Becker explained.

Which means, it's not a matter of if, but when, the nation's spending problem becomes our problem.

"It's kind of like a leaky pipe that you put duct tape on. It's maybe not going to burst today, but it's just getting worse," said Becker. "It's going to build into something that, if not taken care of, is going to explode or let go, or start to see some real adverse consequences."

There are provisions in the act that will continue cutting the nation's deficit. The deal creates a bipartisan committee charged with slashing another $1.5 trillion from the federal budget. If that committee doesn't come to a consensus, federal departments would face an across-the-board cut.

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