The National Debt Clock is seen February 19, 2004. The clock has since been redesigned to accommodate more figures.
The National Debt Clock is seen February 19, 2004. The clock has since been redesigned to accommodate more figures. - 
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JEREMY HOBSON: Now let's get to Washington where the bipartisan group of lawmakers led by Vice President Joe Biden will meet again today in search of a deal to raise the nation's debt ceiling in exchange for spending cuts. The group is hoping to reach a deal by July 1.

Diane Swonk has just been in Washington where she's been meeting with the power players in the debt debate. She is of course chief economist with Mesirow Financial and she's with us live as she is every Thursday. Good morning.

DIANE SWONK: Good morning.

HOBSON: Well Diane, take us inside these negotiations. Are you expecting a deal and what do you think will be in it?

SWONK: There will be a deal, but it won't be written into legislation. There's just not enough time to write it into legislation. But there will be something on paper that is tangible that they get enough cuts in it to actually raise the debt ceiling and I do believe they're going to be working on it as we come back in September from their August break. They're going to be working on a long-term deal for deficit reduction which all the outline of that is going to be in this preliminary deal.

HOBSON: And when you say it's not going to be actually written into legislation do you mean that it's not going to be real deal -- it's just accounting tricks and delayed payments and stuff like that. Or is this the real thing?

SWONK: No, this is actually the real thing. They really are committed to doing something real this time. It's not California and just accounting tricks. This is actually the real McCoy. The problem is you know, hammering out the details, but they are really getting very close. I think on the short term stuff they're within billions of each other. I mean, when you're talking about trillions, 10, or 15, 20 even 30 billion ain't that much so they are getting very close. And they are moving, on both revenues, reforming the tax code, and on entitlements. So far they've yet to touch social security. But they are going after Medicare to give the states more flexibility there. And I think they're going to get where they need to go. And in September when they come back, I think we're going to start to see some real movement on real deficit reduction because frankly the rating agencies said, "We've had enough. It's time to get your fiscal house in order."

HOBSON: Interesting stuff. Diane Swonk, chief economist with Mesirow Financial, thanks so much.

SWONK: Thank you.