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Economy & Business

Sen. Casey: Debt Deal Good but not Great

While Senate leaders were announcing details of a last-minute agreement Wednesday to avert a threatened Treasury default and reopen the government after 16-day partial shutdown, Sen. Bob Casey (D-PA) was saying the deal is just a starting point.

Casey said he is pleased that the proposal called for the Treasury to have authority to continue borrowing through Feb. 7, and the government would be open through Jan. 15, but he would prefer that the deadline be pushed back through the end of 2014 as had been included in an earlier proposal. 

“There is obviously no way to guarantee that there won't be similar last minute agreements,” Casey said.  “We have to try as best we can to persuade people not to go in this direction, either shutdown or get close to the debt ceiling again.”

Casey said the voters of Pennsylvania tell him that they do not want Congress to use a government shutdown and default as a pawn.

“The anxiety that people express in these letters that I’m getting is very similar to the anxiety that people express from the perspective of financial markets,” Casey said.

Moody’s Analytics economist Mark Zandi said the economy cannot continue to suffer under such brinkmanship.  Zandi believes the economy would “take off” if it were not for the fears of bipartisan fighting causing economic chaos. 

Zandi recently downgraded his forecast for GDP growth in the fourth quarter of this year from 2.6% to 2.1% based on the impact of the government shutdown.

“It’s not that it does a lot of damage in any given week or month but over a period of months and years the brinkmanship is doing damage,” Zandi said.

The Dow Jones Industrial Average soared on the news that the threat of default was fading.  It flirted with a 200-point gain in morning trading.

Casey believes Congress must get away from bickering and last-minute deal making so it can do what he calls the job its members were sent to Washington to do.

“To focus on the middle class, to focus on job creation, to focus on the economy instead of having this crisis environment where you are not working on and moving forward strategies that will help the middle class and strategies that will lead to job creation,” Casey said.