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Good morning. Here’s the news:1. The New York Times reports: “President Obama and Congressional leaders of both parties said late Sunday that they had agreed to a framework for a budget deal that would cut trillions of dollars in federal spending over the next decade and clear the way for an increase in the government’s borrowing limit.”
2. The Wall Street Journal reports: “The deal would raise the debt ceiling by $2.4 trillion in two stages, and provide initially for $917 billion in spending cuts over 10 years. A special committee of lawmakers would be charged with finding another $1.5 trillion in deficit reduction, which could come through a tax overhaul and changes to safety-net programs.”
3. The reputation of the United States government has suffered, markedly, as a result of the budget negotiations. David Sanger notes: “It has left America’s creditors and allies alike wondering what had changed in American politics that a significant part of the country’s political elite was suddenly willing to risk the nation’s reputation as the safest place for the rest of the world to invest.”
4. Both parties to the budget deal emerge from it politically bruised and battered. The dysfunctional display of the last four weeks did neither side any good.
5. The Financial Times reports: “Global investors have reacted with relief to news of a debt ceiling deal in Washington that, if passed by lawmakers, removes the chances of an imminent technical default by the US.”
6. Pundit opinion on the debt deal is mixed. Paul Krugman says the president surrendered. Ross Douthat says the president is diminished. The Washington Post Editorial Page characterises the the outcome as “not a solution of which anyone involved in this heart-stopping performance ought to be proud.”
7. Political reaction from the 2012 GOP presidential candidates has been muted. Mitt Romney has maintained strict radio silence throughout the negotiations. Rep. Michele Bachmann (R-MN) has been steadfast in her opposition to any bill that raises the debt ceiling. Texas Governor Rick Perry has stayed out of it, preferring instead to lambaste President Obama.
8. The Assad regime in Syria unleashed a brutal attack on the opposition stronghold of Hama and several other towns in an effort to crush political opposition before the start of the Muslim holy month of Ramadan. At least 80 people were killed across the country.
9. The New York Times reports: “Chinese authorities on Monday accused Pakistan-trained Uighur separatists of planning and executing the first of two deadly attacks over the weekend that struck the ancient Silk Road town of Kashgar in China’s far-western Xinjiang region.” The Wall Street Journal reports: “The weekend’s incidents in Kashgar were part of a sharp escalation in violence in recent weeks in Xinjiang, where Uighurs have long chafed at Communist Party rule.”
10. France’s status as a highly-rated credit risk is very much in doubt. The Wall Street Journal reports: “France already has the highest deficit, debt and primary deficit of any top-rated euro-zone country. Moreover, its government debt as a percentage of gross domestic product is 84%, which compares with 77% for the U.K. and a comparatively chaste 64% for the U.S.”
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