Wednesday, October 2, 2013

Don't Forget the Spending Limit Is Not the Only Government Crisis Developing

There's also the debt ceiling crisis.

Some US federal agencies have closed as the result of the budget stand-off with the White House.  But looming in the not too distant future is the debt ceiling problem.

The US government has begun implementing the “final extraordinary measures” to pay  bills ahead of an October 17 deadline for Congress to approve new government borrowings, Treasury secretary Jack Lew told congressional leaders on Tuesday. The partial shutdown will give the Treasury a few days, or possibly weeks, of breathing room.

I think the debt ceiling problem will be resolved in much smoother fashion than the budget crisis. If Congress doesn't approve an increase in the debt ceiling, it will result in an eventual default on Treasury debt. Not going to happen.

But Politico puts the situation this way:
The Obama administration has said it will not negotiate over the debt ceiling, arguing Congress needs to act because the issue isn’t whether to approve new spending but whether the government should pay the bills it has already racked up.

But Republicans have made clear they will expect some sort of concession in exchange for voting to raise the debt ceiling.

That debate has yet to begin in earnest, however, as congressional leaders and the White House wrestle with the more immediate fiscal fight over funding the government.

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