Oct. 16 - Senate leadership announced they have made a deal to reopen the government and raise the debt ceiling but the economic consequences of getting to this point will continue. Bobbi Rebell reports.
Finally, a deal announced. The U.S. Senate presenting a last minute agreement to avoid a debt default- and reopen the government after a two-week shutdown. Senate Majority Leader Harry Reid: SOUNDBITE: U.S. SENATE DEMOCRATIC LEADER HARRY REID SAYING: "This is not a time of pointing fingers or blame. This is a time of reconciliation. I look forward to working with my colleagues on both sides of this great Capitol to pass this remarkable agreement which will protect the long term health of our economy and avert a default on our nation's debt. " Senate Republican leader Mitch McConnell: SOUNDBITE: U.S. SENATE REPUBLICAN LEADER MITCH MCCONNELL (ENGLISH) SAYING: "The majority leader and I began a series of conversations about a way to get the government reopened and to prevent default. I am confident that we will be able to do both these things." The deal is temporary- and would extend borrowing authority until February 7th, and funds government agencies until January 15th. Mark Hopkins, senior economist at Moody's Analytics estimates the whole political mess has cost the U.S. $23 billion so far: SOUNDBITE: MARK HOPKINS, SENIOR ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "The direct effects obviously from lost hours of work due to furloughs disruptions in productivity but there are also indirect effects that we have started to hear more about. People effecting private sector activity, transportation, commercial activity and these are things that not only are a little difficult to measure, in part because the usual flow of statistical data coming out of these government agencies has ended with the shutdown." He expects it to take a half a point off GDP in the 4th quarter. And Hopkins also warns about the impact on U.S. economic credibility: SOUNDBITE: MARK HOPKINS, SENIOR ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "The fact that we came this close has really tarnished the reputation in a way that I don't know that the U.S. government can quickly recover from and that can have real costs, real financial costs in terms of long run interest rates, and also just the role of the dollar." Whether that can be repaired will depend largely on how the next deal gets done this winter.