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Balancing long term debt and short term debt default

Jill Schlesinger

Steve Chiotakis:Let's get some analysis now on this whole debt ceiling debate. Jill Schlesinger is editor-at-large at CBS/MoneyWatch. She's with us live from New York as she is every Friday. Good morning, Jill.

Jill Schlesinger: Good morning.

Chiotakis: Let's talk a little bit about what the Senator said. He talks about big cuts, right? And shared sacrifice. How are everyday folks feeling about this?

Schlesinger: You know in a recent CBS poll we conducted, two-thirds of respondents think any agreement on the budget and the debt ceiling should include combination of spending cuts and tax increases. But these are two distinct issues, as Conrad said, there's the long-term debt, that's what the gang of six is addressing, and then there's the immediate debt ceiling problem. The August 2 deadline on the debt ceiling has just catalyzed this larger issue, but they are really separate issues.

Chiotakis: That's brought it to the forefront exactly. Now the word in Washington Jill is about patching something together, by first passing short term as you say, to meet this default deadline coming up. How do you think that's going to play with the financial markets and the ratings agencies that are threatening the downgrade?

Schlesinger: Well, you know, I do think this is the first time we've seen a viable game plan that addresses the nation's debt. And ratings agencies and investors don't expect debt ceiling debates going to produce the tidy solution, but they do want to see that there's a plan for action, and I think when the gang of six reconvene, one international investor said to me it finally looks like there are adults at the table.

Chiotakis: All right, Jill Schlesinger from CBS/MoneyWatch. Jill have a great weekend.

Schlesinger: You, too.

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