Erasing debt
Erasing debt - 
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Steve Chiotakis: Meanwhile, with the tales of the debt deal ceiling still coming out, no one knows for sure whether the credit agencies will take their finger off the trigger that would lower the U.S.' AAA rating. While budget hawks may applaud all the cuts, the agencies, such as Moody's and S & P may still think the U.S. debt problem is close to being unmanageable.

Jim Millstein is an expert on corporate restructuring. He worked with the Treasury Department in the tumultuous days of the financial crisis. Good morning,Jim.

Jim Millstein: Good morning.

Chiotakis: Why if we may have a deal today, could we still be downgraded?

Millstein: The deal to be voted on today -- while it does make a modest step towards deficit reduction -- it really doesn't meet the targets that the administration, that Congress set out for itself for the country on this parameter. As a result, we've raised the ratings agencies' expectations as to the kinds of medium term fiscal consolidation, in their language, that we would do, and you know, we're a little short of what they were looking for.

Chiotakis: Let's say Moody's and S & P does downgrade the U.S. credit rating. How would you and I feel that?

Millstein: All other things being equal, the higher your credit rating, the lower your interest costs. So, to the extent that we were to be downgraded, over time, it's likely that our interest costs will be higher than they would otherwise be. Given the size of the debt that the government is carrying, higher interest costs means less money for other things. It'll make the deficit reduction and the investment in the future of the country harder to do because we'll be spending more money on interest.

Chiotakis: What about the political system and the difficutlies that we saw there? Does that hurt our credit worthiness, too? I mean the fact that it took so long and there's so much vitirol on Capitol Hill?

Millstein: Yeah, if you look at what Standard & Poors was focused on -- we did not seem to be able to agree on -- you know, having identified deficits as an issue. So, the credit watch negative that S & P has put us on, it wasn't a function of weakness of the economy, or of any lingering weakness of the financial system, it was really a concern that our political leaders had lost the ability to manage tge government's budget in a kind of responsible fashion.

Chiotakis: Restructuring adviser Jim Millstein. Thank you for your insight this morning.

Millstein: Thanks, Steve.