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Henes: Top 5 Questions for "Debt Ceiling Monday"

"Debt Ceiling Weekend" is over.

A tentative deal has been reached.

Today, the rank and file members of the Senate and the House need to review the bill and vote on it. If they vote in favor of it, the debt ceiling will be raised and the real debt reduction plan will be pushed off to another day.

What is "it"? Without seeing the bill, it is being reported that the debt ceiling will be raised by at least $2.1 trillion. There will be $900 billion in spending reductions over 10 years. A 12 person bi-partisan "super-committee" will be charged with recommending $1.5 trillion in additional cuts over a 10 year period. This recommendations will be due around Thanksgiving. Congress will need to vote on the recommendations by December 23rd. If Congress votes no, then $1.2 trillion of spending cuts will be triggered, 50 percent related to domestic spending and 50 percent from defense.

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CNBC.com

After months of political tactics, debate and finger pointing, this is what our political leaders came up with. Does everyone feel better? Here are the five questions for "Debt Ceiling Monday."

#1 - Will the Debt Ceiling be Raised? The markets indicate it will. At this moment (11:22 p.m. on Sunday night), the futures are up as are the Asian markets. And, most likely, the "bill" will be approved and the debt ceiling will be raised. But, think about what's actually happening. For months, our political leaders have been playing politics with our economy, our nation's credit rating (which may still be downgraded) and our ability to pay our debts when they become due. Now, with one day to go before the Administration would need to pick and choose who to pay and who to stiff, members of Congress are being asked to review, analyze and vote on a bill they haven't seen. Don't take your eye off the ball, the movie is not over yet.

#2 - Will We Be Watching This Movie Again? Yes. Even if the bill is passed, the Administration and Congress still need to agree on the real debt reduction bill. If this political debacle has taught us anything, it has taught us that it will not be easy. It will be just as hard. And we will have the added distraction of a Presidential race starting to move forward with real force. The uncertainty will continue, the markets will bounce around and we will watch political maneuvering rather than sound economic decision-making. The movie has not ended, in some ways it is just beginning.

#3 - Will the Economy Get Better? Not for a long time. The economy is in bad shape. We have tepid growth at best. The unemployment rate remains stubbornly high. The main drivers of economic growth and employment gains - small businesses - can't get off the ground. And, the uncertainty surrounding the economy, the political environment and the markets is making corporate decision-making almost impossible. Don't count on economic growth for some time. Remember, recessions (or depressions) caused by speculation and too much debt don't end quickly. The Great Depression lasted more than 10 years. How long will the Great Recession last?

#4 - Does the Fiscal Crises Facing Our States and Cities Matter? Of course. Our states and cities are hurting fiscally. And, this means every day people are hurting. The critical services people expect and deserve are being cut. Federal aid is disappearing and states and cities are struggling to find a way to survive. There are two important things to consider. First, the spending and service cuts, which result in layoffs, are negatively impacting the unemployment rate. Second, our federal government has a habit of being myopic. We are all in this together - the nation, the states and cities. We need to focus on it all if we want to fix it all.

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#5 - Who Won the Debt Ceiling Game, Republicans or Democrats? Neither and it doesn't really matter. The public (at least those who paid attention) watched in disbelief. One of my good friends said something today with which I believe many people would relate. He said, "if I had my way, I would vote out every nationally elected official today." It was a bad couple of months for our political process. But, it doesn't matter, because we are a long way from 2012. A lot will happen. The spin machines will be up and running, and many new issues will pop up. Don't get too focused on who is winning day to day. We have a long way to go and a lot more to learn before 2012.

There are key takeaways from the debt ceiling debate. The ideological divide in Congress is wide, fixing our debt problem is hard, the economy is in bad shape and frustration over our political process will continue. So, how do we get our nation back in shape? In the words of Andrew Shepard in the American President, "we have serious problems to solve and we need serious people to solve them."

Jon Henes is a partner in the restructuring group at Kirkland & Ellis LLP where he has led some of the most complex restructurings in the United States and abroad across a variety of industries, including media, chemicals, energy, manufacturing, real estate, retail and telecommunications. Jon has also frequently appeared on CNBC's "Worldwide Exchange" as a guest expert on various financial and economic topics, federal, state and local fiscal issues.